L2D reduces vacancies in tough environment


L2D reduces vacancies in tough environment


Published Date: 2019-02-26 | Source: Stephen Gunnion | Author: Stephen Gunnion

L2D reduces vacancies in tough environment

The shopping centre owner says its performance has been supported by an improved tenant mix in the shops previously occupied by Stuttafords.

Liberty Two Degrees (L2D) says the quality of its property portfolio has helped drive positive growth despite a difficult trading environment in South Africa.

While retailers have been under pressure due to weak consumer confidence and as retail groups including Edcon scale back their store footprint, the upmarket shopping centre owner reported reduced vacancies for the year to end-December. It said it was supported by an improved tenant mix in the space at its centres previously occupied by Stuttafords.

L2D converted to a corporate Real Estate Investment Trust (REIT) in November and now includes 2 Degrees Properties as its operating subsidiary and Stanlib REIT Fund Managers, the previous management company. As part of its restructuring, it acquired a further R1.2 billion of the co-owned Liberty Property Portfolio, helping to swell the total value of its own portfolio to R10.15 billion from R8.71 billion.

Rental and related income jumped by 32% to R915 million and net property income rose 37% to R589 million after taking into account the additional assets acquired and asset management income. Fully-diluted earnings per share (EPS) increased by 19% to 70.53c and headline EPS rose 6.3% to 59.86c. It's raised its total distribution for the year by 1.3% to 60c per share.

L2D said trading density in its portfolio grew by 2.9%, underpinned by an improvement in annual trading densities of 3.9% at Sandton City and 2.9% at Eastgate Shopping Centre. However, the uncertainty around the restructuring of Edcon made it difficult to accurately predict valuations or the extent of its distribution growth in the near term.

Its shares fell 2.1% to R7.15 yesterday.


Similar Stories