The Pan Africa Mall in Alexandra, 14 July 2021 after mass looting happened in the area. Picture: Neil McCartney
South African Property Owners’ Association CEO, Neil Gopal, has called on government to institute a modified level 5 lockdown to keep people at home and quell tension created by the unrest and looting of the past few days.
“This will help to stop further looting and destruction of property, contain the spread of the virus, and assist with re-building,” he said. The South African Property Owners’ Association (SAPOA) represents over 800 organisations within the commercial property sector, with members owning 90% of the nation’s commercial real estate.
Gopal believes the alternative to a level 5 lockdown is a state of emergency in selected hotspots, but SAPOA believes this could be overkill.
“However, should the rioting flare up again, we can understand the need for a state of emergency in selected areas.”
At a press briefing on Wednesday, SAPOA unpacked some of the issues surrounding the ongoing looting and destruction of shopping centres, retail outlets and distribution centres.
SAPOA represents over 800 organisations within the commercial property sector, with 90% of the nation’s commercial real estate being owned by the association’s members. Andrew Konig, SAPOA president and CEO of Redefine, pointed out the significant contribution the industry makes to the country’s fiscus.
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The country is in a dire situation as it has now regressed economically while we were still trying to recover from the effects of Covid-19. This event has essentially destroyed all those gains and the gains we attained over the last two decades, Gopal says.
He says the losses for property owners runs into the billions, but it is not yet possible to give accurate figures because the situation on the ground is fluid and keeps changing.
“I suspect there will be serious shortages of food and other basic necessities, job losses and significant increases of Covid infections and Covid-related deaths,” he said.
Konig said during 2020 and 2021, landlords had to bear the full brunt of the lockdown, and continued paying for utilities and property rates to municipalities, even when properties were not rent-producing.
According to SAPOA, some 800 stores have been looted and 100 malls have been burnt down or suffered significant fire damage. In addition, a number of distribution centres, particularly in Durban, were looted and suffered serious structural damage. Konig says the eThekwini economic development and planning committee estimates that about R1.5 billion has been lost in stock and R15 billion in damage to property.
“More than 50 000 informal traders have lost their livelihoods, approximately 1.5 million people have lost their potential to earn an income and about 150,000 jobs are at risk. The overall result of the past five days of devastation is that there has been an estimated loss to the eThekwini GDP of more than R20 billion.”
Malose Kekana, SAPOA president-elect and CEO of Pareto Limited, said not only so-called white-owned monopoly capital-funded properties are targeted.
“Nobody was spared. For a very long-time, black entrepreneurs had no opportunities for investment. The events of the past few days have set back the positive strides that have been made over the past 25 years, particularly in previously underdeveloped areas.”
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He pointed out that many of the malls that made the daily news are owned by black property professionals. “In many cases, those malls in the black townships were built to improve the lives of the communities they serve. The loss of income will affect the very people that the malls were set up to serve.”
Kekana also mentioned that investors will likely think twice before investing more, which ultimately will affect the growing trend of youth unemployment and the immediate ability of those who depended on those centres to earn a living.
Estienne de Klerk, also a former SAPOA president, chairman of SAREITs and CEO of Growthpoint Properties, pledged the industry’s continued support to vulnerable businesses and South Africa’s economy at large.
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“However, I am deeply concerned by the potential breakdown of supply chains caused by the looting and vandalism of distribution centres and the down-stream affect it will have on the end user,” De Klerk said.
“When it comes to security at shopping centres, the reality is that the private sector cannot self-help and must rely on the local law enforcement agencies to provide adequate protection.”
De Klerk also expressed his concern about the slow response of government in reacting to the anarchy across the country.
Michael Lawrence, executive director of the National Clothing Retail Federation of South Africa said he is concerned that Durban, as a port, handles 70% of all imports into South Africa.
“The disruption of the supply chain brought about by targeting distribution centres and the trucking industry in KwaZulu Natal will have a knock-on effect.”
The group added that the repair and re-opening of malls which were burned to the ground will probably take at least two years, while those that suffered relatively little damage may take a couple of months to repair.
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They called for the immediate deployment of more soldiers to restore law and order and that certain areas of the economy, such as ports, hospitals, clinics, food distribution centres, communication towers and shopping centres are declared national key points guarded by the military.
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