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Sri Lanka mall cuts rents in Coronavirus downturn, stock price soars

ECONOMYNEXT – Sri Lanka’s CT Land Development Plc, a property developer that owns Colombo’s Majestic City mall said it was cutting rents as occupancy fell, while its stock price has soared 33 percent since May.

“A temporary downward rental restructuring strategy is being formulated in order to move forward strategically and to maintain the current occupancy levels,” Chairman R Selvaskandan told shareholders in the annual report.

“The Company is cautiously optimistic that the actions proposed will stabilise the economic standing of the tenants, strengthen the bonds of goodwill and also lead to improved profitability for the Company after the year 2022/23 by the implementation of such a strategy.”

The dampened sentiment and Coronavirus lockdowns in 2020 came on top of a Easter Sunday bomb attacks in April 2020.

“Many of the outlets located at Majestic City (MC) were affected,” he said. “Although the Company extended rental waivers and discounted rentals, several tenants opted to cease operations at the MC mall.

“At the reporting date rented shop space amounts to 77 percent of the total rentable space.”

Selvaskandan said with Coronavirus being contained customer patronage had improved at the Majestic City but business volumes had not come back to normal as yet.

“The Company continues to closely monitor the business volumes on a day to day basis to assist the tenants where required and ensure sustainability,” he said.

CT Land was however going ahead with a 360 million rupee refurbishment.

In the June quarter the firm waived rent to help tenants as Coronavirus curfews were imposed.

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“Although there were signs of improvement through the festive season of 2019 the COVID-19 pandemic has again adversely affected the recovery,”

“The Company immediately shut down the complex from mid March, 2020 onwards, and again offered zero and reduced rental schemes to tenants to enable them to cope with the present downturn and mitigate their losses to some extent.”

Revenues fell 78 percent to 29 million rupees in June 2020 quarter and the firm lost 19 million rupees, down from a 55.5 million rupee profit a year earlier.

In the year to March 2020 revenues fell 5.8 percent to 559 million rupees and profits fell 54 percent to 187 million rupees.

Earnings were 3.21 rupees per share.

Meanwhile the CT Land Development Plc stock has soared from 24 rupees at the end of May 2020, to close at 32.00 rupees, up 30 cents by October 02.

Sri Lanka’s stocks rose 12 percent in September, becoming the world’s best performing stock market amid excess liquidity in money markets.

The overnight call money rate was 4.52 percent on October 02. Sri Lanka’s consumer price inflation was 4.0 percent in the 12-months to September. (Colombo/Oct05/2020)