Portfolio Performance Spring - 2020
Total Page：16
File Type：pdf, Size：1020Kb
PORTFOLIO PERFORMANCE SPRING - 2020 CONTENTS A NOTE FROM THE MANAGING DIRECTOR 01 FLANAGAN & GERARD: OVER THE DECADES 02 PORTFOLIO PERFORMANCE: APRIL 2019 - MARCH 2020 03-10 VAAL MALL 03 HIGHVELD MALL 04 MORNINGSIDE SHOPPING CENTRE 05 MALL OF THE NORTH 06 MIDDELBURG MALL 07 SPRINGS MALL 08 BALLITO JUNCTION 09 THAVHANI MALL 10 MUSINA MALL: A NEW ACQUISITION 11 PORTFOLIO STATS: INFOGRAPHICS 12 OUR COMMUNITY INITIATIVES 13 DEVELOPMENT OPPORTUNITIES 14 F&G NEWS: SPOTLIGHT ON THE YEAR 15 Flanagan & Gerard Offices P O Box 350 Rivonia 2128 Morningside Shopping Centre South Africa Disclaimer: The information presented in this brochure contains data, information and intellectual property of Corner Rivonia & Outspan Roads 010 590 4867 Flanagan & Gerard. This portfolio brochure is purely for marketing purposes and includes data collected between April 2019 through to March 2020, as well as historic demographic reports across the Flanagan & Gerard Group Morningside Sandton [email protected] portfolio. Any recommendations, discussions or agreements resulting from the material presented within this Gauteng www.fgprop.com brochure cannot be considered binding unless reduced to writing and agreed by both parties. All rights reserved. A NOTE: FROM THE MD 01 centres were subject to surprise inspections by the government and new technology and trends. This built-in agility has come to the fore in other authorities, and all passed with flying colours. the wake of the COVID-19 crisis. Community Assistance A new attraction starting to pop up in malls is the temporary clearance Being at the coal face of the most immediate impacts of COVID-19 store. These clearance campaigns span brands and retail names but are on society, we knew we wanted to be part of the national response mostly fashion-focused. The lockdown resulted in shortages of some and help those who are hardest hit. We believe that charity begins products but also created surpluses in others. We’re not talking end- at home, and we worked tirelessly with our retailers to support the of-range or end-of-season clearance, but great products that at any waiters, car washers and car guards that usually work at our shopping other time would have flown off shelves. Temporary clearance stores centres but couldn’t, to sustain them and their families. Our shopping are proving to be a fantastic way to give shoppers great deals on good centres also stepped up to be the hub of community efforts to feed products, assist retailers in clearing excess stock, and add new and the hungry and help those in need. We will continue to seek ways that appealing attractions to the shopping experience. we can conduct our business in a manner that considers our society and our environment. Retail Evolution For the short time that trade in alcohol was allowed, some restaurants COVID Relief pivoted to emerge as specialist liquor stores. Other restaurants This pandemic has changed our philosophy from profitability to have subsidised their regular business by becoming a direct conduit sustainability. We understand that our industry’s survival will depend between their suppliers of superior quality or specialised produce on retailers’ survival, and have engaged with the senior management of and the public, selling the ingredients that they would usually use to all retailers in our shopping centres to establish each business’s ability prepare their fare. With the restrictions placed on restaurants, their MUCH HAS TAKEN PLACE SINCE OUR PREVIOUS REVIEW, to survive the current situation. We provided substantial discounts BUT THE EVENTS IN SOUTH AFRICA SINCE MARCH 2020 HAVE to tenants who were forced to cease trade and, in many instances, UNDERSTANDABLY CONSUMED OUR ATTENTION AND THE FOCUS we also provided relief for tenants who were limited in their ability to OF OUR PARTNERS AND RETAILERS IN RECENT MONTHS. trade. The current situation will result in rentals that are more in line On 11 March 2020, the World Health Organisation declared COVID-19 with market forces, and landlords will need to reset their expectations a global pandemic. To ‘flatten the curve’, South Africa went into strict in line with the market. lockdown on 27 March. The impacts of the pandemic and the resulting lockdowns are being felt throughout the world, South Africa, our Some time ago, retailers and shopping centres set out on a journey sector and the Flanagan & Gerard family. There is no doubt that we are together to improve efficiencies. We believe the pace of progress facing a situation unlike anything we’ve had to deal with before. in this regard is going to increase. We are changing the way we do business to be more energy, water and cost-efficient and without a We have a small team of people who responded with agility and doubt, this is where the world needs to go. Also, in the face of reduced initiative to the demands of the COVID-19 lockdown at our shopping municipal service delivery and inadequate infrastructure in many areas, centres. They pulled together in a difficult time, which resulted in we expect more investment and innovation in ways that will help us encouraging solutions. We aimed to ensure that every step forward all to continue to operate during service disruptions. in opening our shopping centres didn’t result in a step backwards in curbing cases. Our team has done well to ensure that our shoppers could Even in these challenging times, we are witnessing unprecedented safely access the goods they needed, and our retailers could safely innovation and agility in the retail sector. Retailing has become an open their doors to trade when mandated. Several of our shopping ever-changing, ever-evolving industry, that is continually adapting to The Refillery, Morningside Shopping Centre demand for produce is reduced, and by creating outlets to sell these It is well accepted that South Africa entered the coronavirus crisis with goods directly to the public, it solves problems for everyone in the a general oversupply of retail space as a result of over-development value chain. We think that this also meets a real shopper demand in many areas. We believe there will be low demand for new projects for artisanal products. People want to know more about where their in the immediate future from retailers, shoppers, and investors for that food comes from, and get closer to makers, creators, and curators. matter. Equally, there is very little development capital in the market. In response to the devastating impacts that COVID-19 is having on We are resolute that we will not add to any oversupply, and instead, small business in particular, many people are actively seeking out local we intend to stay focused on enhancing our existing shopping centres. products and consciously supporting small and local businesses. We hope to include more of these outlets in our retail mixes in future. New Developments With the confines on restaurant operations and many people remaining In the light of the impacts of the pandemic, and in the context of cautious about virus transmission and slow to return to socialising and economic uncertainty, we are assessing the feasibility of the projects the limited entertainment available, shopping centres are going to in our development pipeline to ensure the right timing and approach have to find other ways to create experiences. Without events, retail for each one. We still believe that all of the projects that were on our spaces will have to create their own theatre. Wowing the customer horizon remain great opportunities. Still, the way in which we deliver by greeting them by name and offering great products and services is them has to be considered in concert with how the world and South going to play a top role in achieving this. Africa resets its economic activities. If done right, first-order goods specialists – be it butchers, bakers, Our priority is looking after the shopping centres in our portfolio to EDCON brewers or growers – will lead this experience with their compelling benefit our retailers, shoppers and our partners. Now is the time to Another challenge that was thrust upon us marked the end of an era for specialised product knowledge and personal touches. For instance, unlock potential at these properties and add value. We are prioritising retail in South Africa, with the already weak Edcon being decimated by in the period immediately after the months of hardest lockdown, up-leasing, fine-tuning tenant mixes, including introducing more first- the impact of COVID-19. As part of the business rescue process, CNA we noticed that hip and quirky coffee shops that offer exceptional order goods outlets into our shopping centres, and other appropriate was sold to a consortium of investors led by successful entrepreneur product and their own distinctive brand of service, enjoyed some of value-accretive projects. Benjamin Trisk, the founder of Exclusive Books, in early April. Our the quickest rebounds in trading as they have kept their fans and loyal team held numerous meetings to discuss replacement options for customers despite the business disruption. Edgars within our portfolio. Fortunately, Edgars was given a lifeline by Retailability, with a conditional offer to take over the top-performing Convenience shopping came to the forefront during the hard lockdown, Edgars stores. Similarly, the bulk of Jet stores are under offer from TFG. with its substantial overlap with what was deemed “essential retail Should they be successful, both new deals would be effective from and services”. As a result, more intentional shopping patterns have 1 September 2020. There will still be some store closures, and it is emerged, indeed when compared to the social shopping which we still unclear if any of these will happen in our portfolio. However, with were used to.