L2D reports on new customer count software, footfall recovery

28th May 2021

By: Marleny Arnoldi

Deputy Editor Online

     

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JSE-listed Liberty Two Degrees (L2D) has noted signs of retail recovery, after the country moved back to Level 1 lockdown in March this year.

In a pre-close investor update issued on May 28, the real estate investment trust advised that higher footfall, maintained tenant occupancies, and rental collections and turnover growth had supported a good operational performance so far.

For example, L2D reports that its monthly portfolio footcount in April had improved to 101.6% of the comparative 2019 level. The company has avoided comparing with 2020, owing to the extraordinary lockdown impacts.

L2D’s monthly portfolio footcount improved to 82.4%, 84.7% and 79.5% in January, February and March, respectively, on comparative 2019 levels.

The company has reported R3.5-billon turnover in the first quarter of the year, against a turnover of R3.7-billion reported in the first quarter of last year, but a marked improvement in the turnover reported for the second and third quarters last year, at R1.9-billion and R3.2-billion, respectively.

L2D reported a R4.9-billion turnover in the fourth quarter of last year, supported by seasonal shopping.

From a monthly perspective, the turnover growth trend continued in April to R1.35-billion, against turnover of R1-billion, R1.19-billion and R1.32-billion in January, February and March, respectively.

L2D said super-regional centres, in general, were severely impacted across South Africa during the hard lockdown; however, Sandton City and Eastgate had shown resilience through these uncertain times with turnover for March at 95.2% and April at 96.9% of 2019 levels, respectively.

Strong performing categories across the portfolio include technology, as well as homeware and furniture, which achieved monthly trading density growth of 29.8% and 1.2% respectively compared with April 2019.

Meanwhile, the company has improved its customer counting software as of April 1, allowing for improved analysis of shopping patterns within shopping centres, in addition to traditional footcount.

Customer count measures the number of people by identifying unique patterns, whereas footcount tracks the customer flow at specific points. The customer count software also looks at dwell times, vehicle counts and gender and demographic distribution.

High customer count zones across L2D’s retail portfolio include the apparel, food service and electronics categories. Stationery, entertainment and eyewear and optometry were shown to be low customer count zones.

The customer counting software is also able to assist from a safety perspective by identifying stolen cars, weapons or persons banned from the centres and the improved analysis will be beneficial in the strategic management of the centres.

The company has advised that its Sandton Sun hotel remains the only hotel in the portfolio that was operational up to the end of April, with the Garden Court hotel having resumed operations in May.

The Sandton Sun occupancy rate was 54.6% in April, up from the December 2020 occupancy rate of 46.5%

L2D said its retail portfolio had an occupancy rate of 95.3%, while the office sector was under pressure with an occupancy rate of 86.4% in April.

The company reported that strong leading activity had highlighted the demand for space, with 31 new deals successfully secured by April 30.

L2D continues to meet the changing needs of its customers, including through introducing a drive-in cinema on the roof of Eastgate. Sandton City will follow suit.

The company is also introducing new luxury brand tenants.

Rental collections have continued to increase on a monthly basis and are reported at 104% for May, compared with 94% in April. The high collections in May are a result of the settlement of arrears balances as further rent relief negotiations were being finalised for certain tenants.

The company remains well capitalised with a loan-to-value ratio of 23.6% and unused credit facilities of R247-million.

Moreover, L2D has relocated to new offices on the third floor of the West Office Block, in Nelson Mandela Square.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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