SMME Tenants Face Possible Eviction
Pauline Dikuelo | Monday May 25, 2020 14:06
One tenant told BusinessMonitor they were taken aback upon receiving letters stating that they are required to fulfill their lease commitments and pay the rentals.
“We were surprised because we once made an attempt to consult with the owners (in order) for them to consider giving us some rental-relief, but unfortunately we were not successful as they ignored our emails,” the tenant said.
“Even as the lockdown is being relaxed, we will still take some time to pick up (business) because the pandemic has affected the economy at large.”
In an interview Khumo Properties CEO, Outule Bale said amongst their portfolio, retail has been affected most by the coronavirus (COVID-19) as most of the shops were closed, which hampered the tenants’ ability to pay rent.
“The impact is far-reaching and we have been engaging landlords in properties where we manage to find ways of tackling the rental situation, as almost everyone is affected,” he said.
Last month Molapo Crossing Mall owner, Luc Vandecasteele said in an interview they have been trying to assist tenants and have offered a 40% deferral for May.
“This is based on the deferral granted by the banks. Unfortunately, we will have to pay extra interest to the banks, but tenants will get the cash flow relief we are offered. Most of our tenants are SMMEs,” he said at the time.
Prime Time Holdings group has announced that for the months of April and May 2020 they had to give some rental discounts to tenants adversely affected by the necessitated government interventions, which have restricted, and in some cases, prevented their ability to trade.
“The group is dealing with these concessions to tenants on a case-by-case and month-by-month basis,” reads a statement accompanying the group’s financial results for six months ended February 2020.
In South Africa, the property Industry (PI) group, a collective of major representative bodies for real estate, launched guidelines for assistance and relief for retail tenants on April 7, 2020 and later extended these to all affected retailers, especially the hardest hit SMME retailers.
The PI Group comprising the SA REIT association, SA Property Owners Association and SA Council of Shopping Centres, has extended lease payment-relief for up to three months, with SMMEs in particular receiving the bulk of the assistance.