In the property game, negative reversions are painful. Very painful, in fact. A negative reversion is experienced when a new lease is signed at a rate that is lower than the lease it replaces. In other words, income for that property has gone backwards at a time when inflation is roaring.
The recovery in property is strongly dependent on the type of property in general. Office portfolios are still suffering, as in Emira where negative reversions for the four months to October were -12.6%. In good news, that fund’s office vacancies improved by 150 basis points to 13.5%. Attacq may call them “collaboration hubs” rather than offices, but the vacancy trend between June and October has been the same, improving from 17.6% to 16.9%.
Footfall generally hasn’t recovered to 2019 levels, but retail spend is higher, thanks to inflation and increased basket sizes for shoppers. With Black Friday behind us and Christmas still to come, consumers may defy the odds this year and inject some happiness into a sector that was battered by the pandemic.Sasol shareholders had an unhappy day on Thursday after the company released a trading statement that was light on financial details and heavy on reasons to be worried.