Property Industry Group updates relief guidelines

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The PI Group has increased the extent of assistance, introduced more retailer categories, provided additional options for some retailers and extended the benefits from two months to three months – April, May and June 2020.

The retail tenant assistance and relief guidelines exclude office, logistics, warehousing, industrial, healthcare, hospitality and other tenants.

The PI Group has proposed that small and micro retailers are given rental discounts of up to 100% for April, with further substantial rental discounts and interest-free rental deferrals for May and June respectively. The group has also committed to continuing paying its suppliers in full, including cleaning and security providers, and taking on the increased cost of enhanced hygiene to protect against the spread of Covid-19.

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'Shouldering our share of the pain'

“SA’s property sector has voluntarily committed to the relief guidelines even though it hasn’t received any sources of relief, and we’re shouldering our share of the pain. We are paying our full obligations while giving retail tenants substantial discounts and we have gone as far as we can in assisting retail tenants with our updated proposal. Our entire value chain is only as strong as the weakest link. If all the pressure continues to be placed on a single link, it will break and result in systemic collapse that will be felt in every household in SA,” says Estienne de Klerk, spokesperson for the Property Industry Group and chairman of the SA REIT Association.

“We encourage retailers to pursue all avenues of support available to them,” he adds. The property industry guidelines allocate less support to retailers that have insurance cover or receive relief from other sources in order to focus benefits on retail tenants that don’t qualify for other assistance.

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Preserving jobs

The industry’s assistance and relief guidelines still stipulate that all tenants with accounts in good standing at 29 February 2020 are assured that there will not be any evictions during the lockdown period applicable to them, and they will qualify for some form of assistance from participating landlords. The initiative targets preserving jobs – for retailers, their suppliers and service providers – and to qualify for the relief benefits, retail tenants will need to undertake not to retrench staff during the relief period.

The extent of rental relief (rental includes rent, operating costs and parking rent but excludes all rates and taxes recoveries, utility cost recoveries and insurance), which includes discounts and interest-free deferrals, is detailed in the following tables:

Retail tenant classification and guidelines

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While the updated guidelines include the PI Group’s proposal to the Clothing Retailer Group (CR Group) – representing The Foschini Group, Truworths, Mr Price Group, Woolworths and Pepkor, an agreement on the extent of the rental relief has yet to be reached. The property industry and clothing retailers have jointly compiled and submitted a proposal to government advising on the safe reopening of non-essential retail in shopping centres.