Cell C owes its landlord Attacq millions in rent and has given up its warehouse and walk-in centre on its campus.
Atterbury was the original developer of the Cell C campus. Construction started in July 2012, and the development was completed a year later.
The property, which became a landmark in Gauteng thanks to its excellent visibility from the Buccleuch Interchange, was later sold to the Attacq Property Fund.
The Cell C campus boasts a customer walk-in centre, a data centre, warehouse facilities, and office space.
Cell C took occupation of its new campus at the end of 2013 on a 15-year lease, which means the initial agreement was set to expire in 2028.
However, the company started to struggle financially, and one of the ways to cut costs was to give up parts of the head office.
Cell C has also not been paying rent, which forced Attacq’s hand in getting paying tenants into the property.
In its latest financial report, Attacq listed an expected credit loss (ECL) for Cell C not paying its rent of R10.944 million.
Attacq investment officer Raj Nana explained that the R10.9 million is only a top-up provision – not a R100% provision.
Although Cell C is not paying rent, Attacq has signed an amended lease agreement with Cell C for the 24,955 square meter main office – known as the collaboration hub.
However, the other two properties in the Cell C campus – the 14,014 square meter warehouse and the 4,921 square meter walk-in centre – do not form part of the agreement.
Attacq has re-let the warehouse component of the Cell C campus at market-related rentals for a period of three years.
The new tenant is Global Mobile which provides smartphones and related devices to Cell C and other mobile operators in South Africa.
It is also actively marketing the walk-in centre. Michael Clampett, head of Attacq’s asset and property management, said Cell C vacated the property but has not handed it back.
The amended lease agreement with Cell C is subject to the successful recapitalisation of the mobile operator.
Attacq is now awaiting confirmation of the Cell C recapitalisation programme scheduled for 30 September 2022.
Cell C is still on the hook for its outstanding rent. The new agreement includes two bullet payments to Attacq in December 2024 and December 2026 to cover the outstanding rent.