Covid containment affects Nepi income
CAPE TOWN - New measures by Central and Eastern Europe governments to contain Covid-19 since the end of September were causing temporary limitations to tenants, which affected about 7 percent of Nepi Rockcastle’s gross lettable area by the end of October.
The group,which owns retail centres in central and eastern Europe, said in a trading update yesterday that 25 percent of gross lettable area had been affected by November 18.
This was after there had been a steady pick-up in retail activity across the entire portfolio until September 30, since the reopening of stores in April and May.
Footfall in the third quarter of 2020 was 77 percent and tenant sales 89 percent of prior year levels. Negotiations with tenants following lockdown were progressing and currently 84 percent complete.
The collection rate reached 97 percent for the first six months of 2020 and 90 percent for the nine-month period ended 30 September 2020.
Balance sheet strengthened after the disposal of the Romanian office portfolio in August, at terms negotiated in 2019, and the green bond issue in July. Consequently loan-to-value ratio dropped to 31.8 percent at September 30, well below the 35 percent target, and liquidity reached €1.2 billion (R22bn) .
Since the beginning of October, Covid-19 cases once again increased throughout Central and Eastern Europe, raising new short-term challenges.
“The group’s underlying strength and high potential of the economies where it operates will enable NEPI Rockcastle to return to sustainable growth in the medium and long term,” chief executive Alex Morar said.
Footfall during the third quarter of 2020 was 77 percent of the prior year level, and decreased to 72 percent in October, as new restrictions were introduced.