Non-metro malls help to cushion Resilient

Non-Metropolitan retail centres are outperforming those in metropolitan markets. Des de Beer, the managing director of listed property fund Resilient, said national retailers had confirmed this and the company's board believed it was the result of significantly lower personal debt levels in the non-metropolitan areas and increased social spending.

De Beer said the dominance of Resilient's retail centres in their markets and the high percentage of national retailers had largely insulated the company from the impact of the economic downturn.

However, De Beer said the first six months of the year were characterised by a deteriorating macroeconomic environment, which had a negative effect on retail sales. Retail sales were expected to remain difficult for at least the remainder of this year.

De Beer said the downturn in the resources sector had had a limited effect on retail sales to date but he warned that the impact might simply be delayed.

His comments followed Resilient's report on Wednesday that its distribution had grown by 15 percent to 91.51c a linked unit in the six months to June, from 79.49c in the corresponding period last year.

De Beer attributed this strong performance to strategies implemented over past years rather than actions taken during the six-month reporting period.

Resilient's vacancies dipped to 2.9 percent in June from 3.2 percent last December.

This was a result of its Chemserve Spartan industrial unit being let to Consol Glass.

De Beer said vacancies and arrears had been budgeted to increase for the remainder of the financial year, although a significant deterioration was not anticipated.

Rental income increased by 87 percent to R283.7 million from R151.4m. Property operating expenses more than doubled to R82.2m from R39.9m.

The fund has agreed to sell Isando Business Park, City Deep Industrial Park, Chemserve Spartan and its 25 percent interest in Montague Business Park to Capital Property Fund for R611.5m to improve its focus as a retail fund.

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