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L2D attracts new tenants
L2D attracts new tenants
Published Date: 2019-12-02 | Source: Stephen Gunnion | Author: Stephen Gunnion
The property fund says initiates taken to engage customers at its shopping centres have resulted in trading density growth.
Liberty Two Degrees (L2D) has reduced vacancies at its shopping centres as it continues to attract new tenants. However, the property owner says its office properties continue to face challenging conditions due to an oversupply of space in a week growth environment.
In a pre-closed investor update, L2D said initiatives undertaken this year to engage customers had resulted in positive metrics for the year, with trading density in its mall portfolio growing by 3%, led by an 8.4% improvement at its flagship Sandton City shopping centre. Trading density measures sales turnover per rentable square metre and is used as an indicator of how profitable a shopping centre is.
Its overall property portfolio registered vacancies of 4.4% at the end of September, down from 4.6% in June. It said the improvement was largely due to retail leasing initiatives, which saw vacancies drop to 1.8% from 2.4% in June. It claims to be outperforming its peers, with its retail benchmark at 4.3% according to data released by the SA Property Owners Association (SAPOA). Office vacancies remained flat at 9.8%, below the SAPOA rate of 11% for the third quarter of the year.
Amongst the improvements made at Sandton City aimed at drawing more shoppers, it's opened a new baby care facility called The Baby Care Lounge, including breastfeeding booths, food warming facilities, nappy change stations and a kids play area. Sportscene's new flagship store has also brought several experiential offerings to the centre, including a basketball court, a DJ booth and a tattoo parlour.
L2D said it had identified a number of replacement tenants for the Forever 21 store at Nelson Mandela Square, which is due to close at the end of April after the fashion chain filed for bankruptcy protection. It continued to seek recourse against the previous owner of toy store Hamlets, which went into business rescue earlier this year. It has signed new leases for the stores at Sandton City and Eastgate. Its exposure to Starbucks, which has been sold by owners Taste Holdings, is limited to Sandton City, Eastgate and Melrose Arch and amounts to 0.1% of its gross leasable area (GLA). It's reduced its exposure to retail group Edcon to below 4% of its GLA.
Its shares closed 1.5% down at R6.69 on Friday.