- SmartCentres REIT (TSX:SRU.UN) has so far collected less than five per cent of its expected April rent from its offices, outlets and enclosed mall properties, due to the ongoing COVID-19 pandemic
- As a result, the company is in talks with its tenants to fast-track payments in the coming weeks and, failing that, is considering legal action
- Ignoring small independent retailers and two other retail outlets, the company has managed to collected 70 per cent of its overall expected rent for month
- In an effort to help independent retailers impacted by the pandemic, the company has created a rental relief program to help defer or renegotiate leasing obligations
- SmartCentres REIT (SRU.UN) is up 1.45 per cent, with shares trading for C$20.96 and a market cap of $3.03 billion
SmartCentres REIT (TSX:SRU-UN) has seen its expected rental income for April drop in some retail sectors, due to the ongoing COVID-19 pandemic.
One of Canada’s largest real estate investment trusts, SmartCentres owns more than 150 properties involved in a range of industries, throughout the country.
Thus far the company has collected less than five per cent of its expected April rent from its offices, outlets and enclosed mall properties.
However, SmartCentre noted that disregarding two outlet centres, operated by Simon Properties, it has managed to collect 70 per cent of its overall expected rent for month.
The company remains in talks with its tenants and hopes to fast-track payments in the coming weeks. Failing that, SmartCentres will consider pushing legal action and potentially utilising C$14 million in deposits, reserved from these leasers.
The majority of SmartCentres non-residential properties have been deemed essential. This included the company’s major tenant WallMart, which is involved in 73 per cent of the properties and accounts for more than 25 per cent of rental revenue.
Non-essential small independent retails, who have been hit most severely during widespread-government lockdowns, make up only six per cent of the company’s leases.
In an effort to help this group, Smart Centres is providing a rental relief program to help defer or renegotiate rental obligations moving forward. This relief program is focused on the small retailers most affected by the pandemic and not the large essential chain stores that continue to operate.
CEO of SmartCentres, Peter Forde, is surprised by the lack of rental income from some of the larger companies in its leasing portfolio.
“The majority of our tenants are healthy and paid their rent. While we are disappointed by the non-payment of rent by some strong capable companies, we still believe that we will collect April’s rent in due course.
“We expect strong retailers to pay their rent obligations. This also enables us and our peers to support the smaller more vulnerable retailers through this difficult time,” he said.
SmartCentres REIT (SRU.UN) is up 1.45 per cent, with shares trading for C$20.96 at 10:34am EST.