Precinct-focused and retail-centered real estate investment trust Liberty Two Degrees (L2D) continues to successfully weather the impacts of the Covid-19 pandemic, building on the basis of strong property fundamentals, as it continues to derive value in the current economic conditions from its operational strategy focused on asset management.
In a statement on May 7, L2D CE Amelia Beattie said the company remained focused on “the new ABC of rebuilding for growth strategy and specifically on responding with agility, taking a back-to-basics approach in continuing to build strong property fundamentals and creating new communities of merged environments to complement our precinct-focused strategy”.
L2D’s retail portfolio recorded positive turnover growth in March, when compared to the corresponding month in the prior year, which was impacted by the start of the hard lockdown in South Africa.
Retail recovery remains encouraging as the portfolio generated a strong recovery in March 2021, achieving 27.1% turnover growth and 28.5% trading density growth respectively, compared with March 2020.
L2D said this was largely attributable to the easing of restrictions in February 2021. The portfolio’s turnover for March was R1.3-billion and was only 6.4% below the 2019 turnover levels, while luxury brands contributed 8% towards total turnover, with a year-on-year growth of 109%.
Other strong performing categories across the portfolio include homeware and furniture, technology and apparel.
“All of our malls recorded positive turnover growth in March 2021 when compared to the corresponding month in the prior year, with three of our malls recording turnover growth for the latest reported quarter, reflecting an encouraging trend.
“Notably, Sandton City has had a remarkable recovery and achieved its highest turnover in March 2021, compared to the preceding five years’ months of March. Turnover for March 2021 was up by 41% compared to the preceding year and 2.6% higher than March 2019. The 2021 first quarter was only down 2.1% on 2020 and down 3.5% on 2019,” added L2D COO Jonathan Sinden.
The January 2021 monthly portfolio foot count was 72.1% owing to the lockdown restrictions implemented at the end of December 2020.
The easing of lockdown restrictions in February 2021 enabled the portfolio foot count to recover to 81.6% of the prior-year comparative month on a like-for-like basis. The monthly portfolio foot count for March 2021 improved to 99.4% of the comparative 2020 level which was, however, impacted by the initiation of the Alert Level five lockdown at the end of March 2020.
L2D’s retail occupancy, which has shown resilience especially considering the current economic climate, remains high at 95% at March 2021, while the office sector continues to be impacted by the work from home trend resulting in an 86.7% occupancy rate at March 2021, which the company said is largely attributable to further office vacancies at Melrose Arch.
There was a notable improvement in occupancy levels in March 2021 compared with March 2020, at Nelson Mandela Square, Atrium on 5th and the Umhlanga Office Building; a positive trend, the company indicated.
“A new artificial intelligence software has been installed on our camera system throughout the portfolio. The installation began providing real-time monitoring and customer counting capabilities from April 1.
“The new software will enable us to better understand our customers through advanced data analytics and will further enhance the safety of our shopping environments,” added Sinden.
Further, a total space of 12 622 m² has been successfully renewed in 2021, with 4 052 m² in the retail portfolio and 8 570 m² within the office portfolio.
Adidas will open its first Halo store in South Africa at Sandton City, offering an interactive and completely revolutionised retail experience, and ARC, a cosmetic emporium, is another new original store which will open its doors in Sandton in June.
Luxury has been doing well as a category and Sandton will add to this category with the addition of Alexander McQueen, a first in South Africa. Alexander McQueen will be located within the Diamond Walk and will take a portion of the former Prada shop.
Chanel will also unveil its first standalone flagship fragrance and beauty boutique at Sandton City at the end of May. Another first for the portfolio.
Both Sandton and Eastgate will open new Armani Exchange stores in the coming month.
Midlands Mall recently opened its first iStore pop-up which will be converted into a permanent store in future.
These new tenants are testament to how L2D partners with its tenants to deliver a compelling customer experience, the company said.