South African real estate investment trust Liberty Two Degrees (L2D) has reported good results for the first half of the current financial year. L2D is focused on retail precincts, and its portfolio includes the Sandton City Mall, one of the country’s leading upmarket shopping malls.
“Our retail portfolio has delivered market leading trading performance over the period,” affirmed L2D CE Amelia Beattie. “The portfolio continues to show improved annual trading density, recording the highest densities to date in May 2023 at R51 664/m2, or 13.0% growth compared to May 2022 – against a comparison benchmark of 10.1%. We also generated a 6.8% increase in turnover compared to [half-year 20]22 and recorded a 9.1% growth in footcount compared to the same period – demonstrating unrivalled innovation and customer-centricity in our spaces.”
The company would pay out 18.77c a share for the interim period for this year, which is a 7.4% increase, year-on-year. Its net asset value per share rose by 0.8% to R7.59. Retail occupancy was 97.1%. And, Sandton City achieved an annual trading density of R78 800/m2. All but one of the company’s centres showed higher trading densities, year-on-year. The exception, the Midlands Mall and Lifestyle Centre in KwaZulu-Natal, had reported elevated performance last year because other shopping malls in its area had been closed by the riots that had afflicted the province; these malls had since reopened.
Many shopping malls included office towers or annexes. “We remain focused on office leasing with the office occupancy improving to 82.1% at June 2023 compared to 80% in December 2022,” she reported. This brought the total portfolio occupancy rate to 93.6%.
“Net property income, excluding the impact of lease straight lining, grew by 8.2% over the period supported by the core retail portfolio and a recovery in the hospitality assets,” reported L2D CFO Barbara Makhubedu. “Like most businesses in the sector, increased utility costs as well as increased periods of loadshedding remain a concern. However, we are pleased that cost containment has been managed well, with property operating costs only reflecting a 5% increase and head office operating costs increasing by only 2% compared to the previous year.”
The company assured that it was progressing in all elements of its sustainability plan. It was targeting net-zero carbon emissions by 2030.
L2D also highlighted the July 27, 2023, announcement that the Liberty Group intended to buy out the minority shareholders in L2D. The offer was to buy their shares at R5.55 each, which was a premium of 46.4%. (The Liberty Group is itself a subsidiary of the Standard Bank Group.)