Liberty Two Degrees only has 2% exposure to Game, Makro, Dion

South African real estate investment trust Liberty Two Degrees [JSE:L2D] said in a voluntary update on SENS on Tuesday that its overall exposure to Walmart-controlled Massmart [JSE:MSM] is 2% of its portfolio's gross leasable area (GLA).

L2D said it made this voluntary update in response to the announcement released by Massmart on SENS on January 13, 2020 regarding the potential closure of some of its Dion-Wired and Masscash stores.

Massmart announced earlier that it could shut 34 DionWired and Masscash stores. Massmart, one of SA's largest retailers, also owns Game, Builders Warehouse and Makro, among other brands.

In L2D's portfolio there is one Dion-Wired store located at Sandton City, which represents 0.11% of portfolio GLA. The store is currently open and trading as normal, according to the L2D statement. There are no Masscash stores within the L2D portfolio.

Massmart is currently consulting with its employees about the potential closure of the 34 stores.

Fin24 reported on Monday that Massmart has become the second SA company to announce possible store closures in 2020. Clothing retailer Edcon recently announced the closure of its Edgars store in Rosebank Mall, also citing underperformance.

Fin24 reported in August 2019 that Massmart suffered a headline loss of R550 million for the six months to end-June. This was after earning a profit of more than R200 million in the same period in 2018.

The company said it was impacted by a 12% increase in costs due to higher salaries after the introduction of the minimum wage, load shedding and steeper municipal tariffs.

* Compiled by Carin Smith