[ad_1]
Several clothing retailers are collectively offering R220 million to owners to cover their rent during the coronavirus blockade (Covid-19).
On Sunday, clothing retail groups The Foschini Group, Truworths, Mr Price Group, Woolworths and Pepkor said that after their discussions with the Property Industry Group, they came up with a counter proposal, offering to pay R220 million instead.
“Basically, we are looking to pay 20% of the normal rent that the aforementioned retailers would have paid if they had paid the full amount,” said executive director of the SA National Federation of Clothing Retailers, Michael Lawrence.
Clothing and other retailers that do not provide essential services cannot trade during South Africa’s five-week shutdown.
With their stores closed for so long, the owners came out last week to offer an industry-wide package of help to retail tenants who are hit hardest by the suspension of trade.
The recently formed Property Industry Group formed by the SA REIT Association (SA REIT), the SA Owners Association (SAPOA) and the SA Shopping Centers Council (SACSC) said that although their main focus was to help small companies decided to support large retailers also for the sake of preserving jobs. The group proposed between 35% and 100% discount for small retail clients, such as restaurants and travel agencies, and 35% discount on rentals for non-essential retailers with an annual turnover of more than R80 million for April 2020. It also proposed defer a portion of all affected retailer rentals to April and May.
But during talks with clothing retailers, the Property Industry Group gave a general guideline to pay 20% of their normal rental amount and the utilities they consume during the shutdown, which is how R220 was arrived at.
Lawrence said that while retailers received legal advice and opinions that their rents do not expire during closing for those who are not operating, the federation wanted to take a constructive approach that will benefit both retailers and owners.
“In building our proposals, and due to the divergent nature of our operations, we had to find a guide that we all agreed on, to help shape the most appropriate response in these unprecedented circumstances,” he said.
He said cooperation was necessary because the owners also face their own economic pressures during the shutdown.
Other retailers, including Yum! The brands, which own KFC, have decided to withhold the rent due to some of their outlets.
