Big squeeze on malls
Stuttafords’ shutdown may be only the tip of the iceberg for mall owners, who are facing further tenant failures and store closures as consumer spending tightens. But it’s not necessarily all bad news
The demise of Stuttafords and the looming closure of a number of Edcon stores will bite into the earnings of shopping mall owners, who increasingly face rising vacancies and falling rentals. JSE-listed mall owner Hyprop Investments expects it will take six months to find new tenants for the 11,000m² of space left empty following last month’s closure of Stuttafords stores in three of its flagship shopping centres. Hyprop CEO Pieter Prinsloo says it’s too early to say what the impact will be on the company’s bottom line. "It will depend on how long the stores stand empty and what rental levels we can achieve on new leases."’ However, he concedes that the Stuttafords store closures will negatively affect dividend payouts to shareholders for the year ending June 2018. Hyprop is the JSE’s largest specialist retail-focused real estate investment trust (Reit), with a market cap of R30bn. It has in recent years consistently outperformed the sector, both in terms of income and capital growth...
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