V&A welcomes slow return of visitors
The Victoria & Alfred Waterfront, JSE-listed Growthpoint Properties’s flagship property, is starting to show a “nice gradual recovery” as SA’s economy opens up after hard lockdown.
The V&A, with 500,000m² of developed property including 15 hotels, 450 shops, 80 restaurants, and 120 office tenants, usually receives about 80,000 visitors a day during peak tourist season and 26-million visitors a year. It had grown hotel occupancies 8% in the 12 months to February 2020.
“Everything was growing in contrast to the national economy. Part of the reason for the Waterfront’s success has been the continual growth in tourism,” V&A CEO David Green said last week.
All this changed with Covid19, with Green saying that during the “the first few days of lockdown we dropped all the way down to 3,500 visitors a day.”
As lockdown restrictions were eased, the property has showed a recovery. Green said it is receiving 20,000 to 25,000 people a day during the week and 45,000 a day on weekends. “There is a nice gradual recovery, but the main change will come when the market opens up to international tourists,” said Green. Foreign tourists usually account for about 27% of visitors.
At Growthpoint’s recent results presentation for the year to June, South African CEO Estienne de Klerk said that up until March, the V&A had delivered the “same consistent story we’ve had” since the group acquired it in 2011 in a 50-50 partnership with the Government Employees Pension Fund, managed by the Public Investment Corporation, for just under R10bn.
“It was pumping there with double-digit growth. Added developments such as the cruise terminal had certainly assisted the V&A until the Covid scenario played out.”
Though trade and footfall are improving, he said, the hard lockdown that began in March severely affected the precinct.
Net property income at the
V&A is down 9.6% for the year. The last quarter of its financial year “had a very big impact on the V&A”. Rental discounts for tenants were R12m and deferrals R58m. Arrears spiked to more than R120m. Collections for the past few months of the financial year proved difficult. The V&A collected 65% of rent in July but this is improving as lockdown reduces.”
Hotels have suffered in lockdown as international tourists are barred from travelling to SA, but the Radisson Red and City Lodge in the precinct remained open by securing Covid-related trade.
De Klerk said office tenants at the V&A tended to be large tenants that continued to pay their normal rents. — BusinessTimes