Nelson Mandela Square
Real estate investment trust Liberty Two Degrees (L2D) says the attraction of its brick and mortar stores, complemented by unique experiential offerings, continues to draw customers to its retail landscapes.
The JSE-listed company on Friday reported that its overall annualised trading density had grown by 3.3% at the end of June this year, which continued December 2018’s growth of 2.9% and June 2018’s growth of 2.8% over the same asset pool.
L2D said trading densities across most centres had shown considerable improvement, with Sandton City having grown its annualised trading density by 7.9% to R57 563/m2 and ending up 53% higher than the Clur benchmark, which was R37 628/m2.
Nelson Mandela Square (NMS) showed a substantial turnaround with 6.5% annualised trading density growth in June, compared with a contraction of 1.3% in December 2018 and a contraction of 4.7% in June 2018.
NMS had an annualised trading density of R57 770/m2 in June, which is 65.1% higher than the Clur benchmark of R34 984/m2.
Eastgate shopping centre is compared to the super regional benchmark excluding Sandton City to remove the impact of significantly higher trading density of Sandton City, which skews the benchmark. When Sandton City is excluded from the super regional benchmark, Eastgate’s annualised trading density of R36 587/m2 is 7.7% higher than the adjusted benchmark for the annual trading density of the super-regionals of R33 983/m2.
“Continuous enhancements to our retail and office environments are core to our ability to attract and retain tenants, as well as draw consumers to our retail centres. This is evident in that we have spent, on average, 2.2% of the value of the portfolio on maintenance capital expenditure between 2014 to 2018,” said L2D.
The company’s overall portfolio vacancy rate of 4.6% was largely attributable to the office sector.
The retail vacancy as at July this year was 2.3%, compared with a 2.4% vacancy rate reported in June.
L2D noted that its retail centres continued to attract a range of new tenants, including Mango, Daniel Wellington, African Bank, Hydraulics AvantGarde, Out of Africa, Watch Avenue, Moreschi Shoes, Gadget Candy Fabiani and Sneaker Factory.
Sandton City will soon unveil new line stores such as My Cotton Tree, together with a baby care facility called the Baby Care Lounge, which has breastfeeding booths, food warming facilities, nappy change stations and a kids play area.
“The resilience of the L2D portfolio is evident in the annualised trading density and turnover growth generated, which continued to gain momentum evidenced by comparing June 2018 to June 2019.
“While the portfolio’s vacancy rates have remained in line with that of May, leasing strategies and engagements with prospective tenants are well under way which has resulted in the reduction in the vacancy rate including pre-lets.
“L2D has continued to deliver on the five building blocks initiated at the beginning of the year. Several initiatives have successfully been implemented with further strategies in the pipeline to ensure L2D is ready for the ever-changing retail environment,” the company stated.