LEASE ARRANGEMENTS

Operating lease arrangements where the group is a lessor

The group’s main leases are contracts with tenants in respect of its investment properties held in HPF. The group also rents out retail space in its hotels properties. Rental income is based on fixed, fixed and variable and variable lease agreements concluded with tenants. The majority of the leases are fixed and variable with the fixed rental amounts resetting after a number of years. In the long term, fixed rentals should always exceed variable rental income received. Property rentals (including investment property rentals – refer note 18: Investment properties) earned during the year was R331 million (2019: R357 million).

At the balance sheet date the group had contracted with tenants for the following future minimum lease payments under non-cancellable operating leases of property, plant and equipment in the aggregate and for each of the following periods. The rentals below relate only to fixed rentals and do not include any variable rentals or escalations based on CPI: