Delta Property Fund, which drew nearly 80% of its revenue from government tenants in the six months to August, says tardiness by the state in renewing leases is making it difficult to operate. Many state entities had been renting offices from Delta and other property owners on very short lease terms, which had created uncertainty. CEO Sandile Nomvete said it was difficult for Delta to raise debt and spend capital on large projects because it could not provide banks with consistent information. “It’s hard to provide accurate cash-flow projections when we don’t have certainty over the income we expect to receive. Right now many state entities are signing leases which last a few months. It would make our lives much easier if they could sign leases with terms of five to 10 years. Ironically, they would actually pay lower rentals if they committed to longer terms,” he said. Nomvete said the department of public works (DPW) had committed to renewing all the leases it had with the largest ...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, Morningstar financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.

Questions or problems? Email or call 0860 52 52 00.