The determination and disclosure of the contribution of turnover rent to lessor revenue in the South African retail property sector

• Main Author: Kruger, Leopold Ferreira
• Other Authors: Wingard, H. C.
• Format: Others
• Language: en
• Published: 2016
• Subjects: Disclosure of contingent rent; Landlord; Lease agreement; Lessee; Lessor; Optimisation of rent; Prime interest rate; Property management; Rental income; Retail centre; Retail trade; Revenue; Turnover; Turnover rent; 333.540968; Landlord and tenant > South Africa; Commercial leases > South Africa; Commercial real estate > South Africa; Real estate management > South Africa; Rent control > South Africa; Rent charges > South Africa
• Online Access: Kruger, Leopold Ferreira (2016) The determination and disclosure of the contribution of turnover rent to lessor revenue in the South African retail property sector, University of South Africa, Pretoria, <http://hdl.handle.net/10500/20666>; http://hdl.handle.net/10500/20666

Notes: i) the terms "lessee" and "tenant" are used alternatively, the latter only when quoted ii) the terms "lessor" and "landlord" are used alternatively, the latter only when quoted === The research intends to assess the availability of information to determine the contribution of turnover rent to lessor revenue as the publicly available information on building performance, and in specific turnover rent, is not adequate to answer the research problem. Academic, legal and accounting sources are consulted and referenced as background on turnover rent. Limitations applicable to the study is noted. A content analysis of published financial statements analyses the application of the prevailing accounting standards in the real estate sector and assesses to what extent information is available to determine the contribution of turnover rent to lessor revenue. Disclosure was found to be inconsistent and inadequate to calculate the contribution to lessor revenue and to assess individual building performance. With relevant building performance data of a large retail centre sourced from an asset manager, the contribution of turnover rent to lessor revenue was calculated for a period of eight years as part of a retail centre case study. With information available, but not disclosed, it is recommended that the IASB considers additional disclosure for listed real estate entities to enable stakeholders to assess individual building performance. Further recommendations are made in this study. The building performance indicators were further compared to relevant economic indicators. The results of this analysis indicates an indirect correlation between the prime interest rate and three building performance indicators being lessee turnover, total rent collected and centre foot-count. This confirms the strong reliance of the South African retail sector on credit sales. === Financial Accounting === M. Ph. (Accounting Sciences)