Non-material impact of Covid-19 on REIT Portfolio to date; Liquidity position remains strong
OPERATING UPDATE
Tenants
- As of
April 16, 2020 , rental collections for the month of April and for the quarter endedJune 30, 2020 have been in line with pre-COVID levels, with a few minor exceptions. To date, the REIT has received more than 95% of the April monthly rents on its German portfolio, and 70% of the 2nd quarter rents on its French portfolio. The REIT expects the collection of rents from smaller tenants to continue such that the REIT expects to reach at least 90% of the 2nd quarter rents inFrance and 98% of the April rents inGermany . - The REIT's portfolio consists only of office tenants and has no hospitality or retail exposure, which are industries particularly affected by COVID-19.
- To date, the requests from tenants for rent assistance have been minimal but those that have requested assistance have either asked for a deferral of payments for a period of 3-6 months or cancelation of their rent until the end of the confinement period (from
March 15 th). Management has been assessing such requests on a case by case basis based on their nature and economic legitimacy. - The impact to date of rent delays or cancelations represents approximately 10% of the REIT's quarterly NOI and approximately 3% of the REIT's annual NOI.
As governments, businesses and communities are facing the short-term impacts of COVID-19 on economic growth, business activity and individual behavior, a rebound in the global economy is not expected before Q2 2020. The German and French governments have begun to suggest cautious re-entry plans, beginning on
Debt Management
Management has contacted all of its lenders in
As at
We expect the postponed amounts to either be added to the loan amount and paid at maturity or be paid back in additional even installments either (i) over the rest of the loan period or (ii) will be paid back in additional installments over the next two years (2021 and 2022).
Management contacted all of its lenders in
Given the REIT has experienced very little impact in
Liquidity
Following the sale of Vanves in
- As of the year ended 2019, the REIT had
$55M of cash on balance sheet. - Debt maturities in 2020 are
$36.75M which the REIT is currently negotiating in order to extend for at least 3 years.
The REIT will continue to assess market conditions and intends to utilize a portion of its liquidity for its previously announced normal course issuer bid as well as for attractive asset acquisition opportunities that it expects to see over the balance of 2020.
(Euro/CAD – €1/
ABOUT
Forward-Looking information
This news release contains forward-looking information within the meaning of applicable securities legislation. Forward-looking information generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans", or "continue", or similar expressions suggesting future outcomes or events. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, global and local economic and business conditions; ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest and currency rate functions. The REIT's objectives and forward-looking statements are based on certain assumptions, including that the Canadian and European economies remain stable, interest rates remain stable, conditions within the real estate market remain consistent, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. In particular, there is uncertainty about the spread of the COVID-19 virus and the impact it will have on the REIT's operations, the demand for the REIT's properties and global supply chains and economic activity in general. All forward-looking information in this news release speaks as of the date of this news release. The REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise except as required by law. Additional information about these assumptions and risks and uncertainties is contained in the REIT's filings with securities regulators, including its latest annual information form and MD&A.
SOURCE
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