Despite lockdown, it is business as usual at Atterbury… or at least, business unusual. Atterbury South Africa CEO Armond Boshoff answers some burning questions.
The COVID-19 pandemic is something no business could have prepared for. What are the immediate implications for Atterbury?
Firstly, I want to reiterate Atterbury’s support of President Ramaphosa and Government’s initiatives in attempting to stop the spread of COVID-19.
The implications for Atterbury are two-fold. Firstly, the practical challenges for our staff and secondly, the effect on our business. Let me start with number one: the early closure of schools came as a bit of a surprise and we had to make arrangements to allow our people to look after their children during that time. This meant that we had to implement flexible work arrangements early on in order to keep our people safe and still remain productive. The second implication is a little more complex. A lot of our tenants are not able to trade and thus cannot derive revenue during this time – this is particularly true for our retail tenants, with the exception of those classified as “essential service” providers by government. Furthermore, we need to ensure that our shopping centres and industrial and office assets are secure, safe and clean during this period to minimise the risk of the pandemic spreading. Our staff and shopper safety is of critical importance to all of us at Atterbury!
What specific measures has the company put in place in response to the pandemic? How are you handling the lockdown, for instance?
Firstly, we had to physically close our offices in line with the government directive. Accordingly, we had to ensure that all our staff are able to work remotely, in order for us to maintain our operational capacity. So, we are fully functional and remaining productive in managing our assets in this tough time. This will ensure that we are well placed to return back to some sort of “normality” when the lockdown period is lifted (hopefully soon).
Secondly, we have increased our security contingent and cleaning frequency to ensure our centres are as safe as possible for our shoppers. We have also opened all boomed entrances at our centres to make access as easy and convenient as possible.
Thirdly, we had to close all our construction sites, which will result in considerable delays in the completion of these projects.
What were to happen operationally, should the lockdown have to be extended beyond 21 days?
Atterbury remains operational during this time. From an operational perspective we are “all systems go”. An extension of the lockdown will however have dire consequences for our tenants who are not able to trade during this period. Many of them do not have a large liquidity buffer to sustain them for a long period. We are however working with all of our tenants, banks and other stakeholders to ensure that we minimise the economic effect of the lockdown.
How has Atterbury weathered other, lesser storms, and are there any lessons to be learnt from those actions, which the company can apply in the short and also the medium term?
This is an unprecedented crisis which affects everyone in South Africa, and in fact globally. So, whereas most other events might affect an industry, or maybe a country, this time it is more far-reaching. It is thus of critical importance for all of us to work together in an attempt to find workable solutions for all. We are in continuous engagements with our staff, tenants, banks and other stakeholders in formulating plans to deal with this. I believe that the relationships that we have worked hard at establishing during the past 26 years will now help us achieve this common goal.
There are great fears for the economy, exacerbated by Moody’s downgrading South Africa to junk status in the middle of this pandemic. How is Atterbury approaching this gloomy outlook, looking forward to the rest of 2020?
I think the downgrade was expected and to an extent priced into the markets. However, we have seen a massive weakening in the Rand lately and a blow-out of long dated interest rates, which will have a negative effect on highly geared landlords and society as a whole. I expect that the economic pressure we’ll all experience post COVID-19 will be severe, and thus we need to be ready to proactively manage the situation, probably for the next 18-24 months. We expect our retail tenants to take some time to get back to normal trading conditions.
But, and this is a big but, we will also see a lot of opportunities during this time and will be ready to act accordingly. We have a very strong and dedicated staff compliment that will drive us through this difficult time, and we are ready to take on any attractive opportunities that might arise.
What is your take on the impact that COVID-19 will have on the way we do business in future? Or do you expect that the world will go back to the way things have always been done, once the crisis is over?
As after all crises, a sense of normality will always return. However, things will certainly change. We have always been of the view that corporates will, in time, reduce their office space requirements as people adopt more remote working regimes. I expect that this will be significantly accelerated as companies realise that it is practically possible for some employees to work remotely and remain productive. I think that “click and collect” facilities will gain demand in the medium term as well as the increase of mixed-use assets or precincts. I believe this crisis has also shown us that our approach to precinct-type developments is the way to go. The convenience and flexibility that is created when people can work, live, shop, play and entertain within close proximity, is in high demand.
In closing, do you have a message for the whole Atterbury’s network?
I pray that all our staff and families, partners, tenants and all other stakeholders remain safe and healthy. We remain committed and at your disposal!