Liberty Two Degrees says shoppers are returning


Liberty Two Degrees says shoppers are returning

Published Date: 2021-02-23 | Source: Stephen Gunnion | Author: Stephen Gunnion

Liberty Two Degrees says shoppers are returning

The property group says turnover at its shopping centres recovered to 91 percent of 2019 levels in the final quarter of last year.

Liberty Two Degrees (L2D) says its property portfolio has recovered somewhat from the severe impact of last year's lockdown as shoppers returned to its malls around the country. However, it still reported a big decline in full-year earnings and lowered its distribution.

The real estate investment trust, which owns centres that include Eastgate, Sandton City, Melrose Arch, Midlands Mall and Botshabelo Mall, said after trading activity ground to a halt in the second quarter of last year there was a strong resurgence in the final quarter, with its portfolio turnover only 9% down from a year earlier. Turnover at its Sandton City was just 1.5% lower. And although footfall at its centres for the year was down by about 30%, the total amount spent by customers was just 20% lower, indicating increased spend per customer.

Revenue for the year to end-December fell 12% to R879 million and net property income sank 46% to R377 million as it provided rental relief to tenants, earned lower parking revenue and increased provisions for tenant arrears. That left profit from operations 49% down at R342 million. Headline earnings per share declined by 57% to 25.04c and it lowered its distribution per share by 47% to 32.33c. Its net asset value at the end of December was 20% lower at R7.71 per share after it wrote down the value of its property by R1.7 billion, or about 16.3% of its portfolio value.

L2D said while the environment remained challenging and it would take time to fully recover, it had strong assets, sufficient liquidity and headroom in its loan-to-value ratio, which measures debt against the value of its property portfolio. Retail occupancies remained high at 95.3% at the end of December and it said it was encouraged by the early signs of recovery in tenant turnover levels as lockdown restrictions eased.

Its shares rose 0.8% to R4.89 yesterday, adding to a 13% gain on Friday ahead of the release of its results.

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