Business & Investment

Fix Vukile-owned malls damaged by riots to lower prices than expected

The JSE-listed Vukile Property Fund expects the cost of repairing real estate damaged by the recent civil war to be less than 2% of the value of South Africa’s retail portfolio.

I confirmed this Sense update “The estimated damage suffered was less than initially expected and significantly lower than Vukile’s insured amount,” he added last week.


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The fund’s direct retail investment in Southern Africa is approximately R14.7 billion, and the cost of repairing affected real estate could be less than Ran 300 million.

“I’ve spent the past week in the field with a dedicated team of advisors and have been actively involved with tenants, service providers and insurance companies. Management will recover estimated damage and damaged assets as soon as possible. I fully understand the project plan. ”

read: Scale of destruction

The fund also reported a potential loss of rental income of less than 3% of the company’s total annual rental income to be claimed by the insurance company.

“Abundant facilities”

“Vukile ensures that the center is fully operational as quickly as possible, with ample unused facilities at its disposal so that the company can carry out repairs before the claim is finalized. I emphasized.

A South African retail portfolio of 45 properties, a real estate investment trust (Reit) initially reported that six properties in shopping centers in Kwazur Natal and Houten were damaged by the riots and looting in early July.

Citizens’ unrest arose in two main states after former President Jacob Zuma handed over to police for 15 months’ imprisonment for contempt of court. The turmoil destroyed at least 161 shopping centers, 11 warehouses and 8 factories, killing more than 300 people.

Vukile expects most of the affected properties to be fully functional from mid-August to the end of October 2021, and most of the damage is related to storefronts, roller shutter doors, fixtures and accessories. ..

Only the Kwa-Mashu shopping center in KwaZulu-Natal suffered serious structural damage. This accounts for 60% of Vukile’s total losses to South Africa’s retail portfolio and is expected to be fully functional by April 2022.

Following unrest in July, President Cyril Ramaphosa announced the government’s intention to support affected businesses.


Treasury Minister Tito Mboweni and Secretary of Defense Dond Mogajane last week worth R36.2 billion to not only cover claims from affected businesses, but also contribute to social relief and funding for police. The South African National Defense Force has revealed that its financial support package will be used.

SMEs affected by riots and looting suffer the most financial burden, according to Keiren Ndrov, head of a listed real estate fund in Stanlib.

“It’s a shame that some small tenants may not be able to recover. [But] Some people benefit from government support and incentives from landlords, “he told Moneyweb.


Ndlovu also said that the riots and looting seen last week, albeit destructive, do not discourage businesses from looking for growth opportunities in the towns where most of the riots and riots occurred. rice field.

read: SA Properties, retailers bet on townships despite anxiety

“Self-confidence is declining, but demand for retail services and merchandise has not disappeared. In some areas, people have to travel longer distances to shop.

“Undamaged centers and centers that can open faster will benefit from additional demand in the short term,” he said.

“Long-term opportunities remain in the low to medium LSM market. This is where the population exists and the opportunities for growth exist.”

Fix Vukile-owned malls damaged by riots to lower prices than expected Fix Vukile-owned malls damaged by riots to lower prices than expected

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