Growthpoint declined Edcon’s request for a rental reduction
The property company provided a cash injection in return for an equity stake, but says cutting its rent would not be in line with its strategy
Growthpoint Properties says it turned down Edcon’s request for a rental reduction. While the SA property giant participated in Edcon’s restructuring, by providing it with an injection of R110m in return for an equity stake, Growthpoint said a rental reduction for the troubled retail group would not have been in line with its own strategy. “Growthpoint was among the landlords approached in December 2018 to consider a rental reduction for retail space leased to Edcon's brands. “Given that our business model is based on contractual leases that provide a steady stream of annuity income, we did not want to compromise this by agreeing to the request for a rental reduction,” it said on Wednesday. Growthpoint said it had already decreased its exposure to the retail group by about 9,000m² since the end of 2017.
Its exposure was expected to decrease by at least another 18,000m² over the next two years. Edcon’s R2.7bn recapitalisation deal involved landlords, the Public Investment Corpor...