JSE-LISTED EPP, Poland’s biggest retail landlord, said yesterday that the outpacing of vaccine roll-out targets led to a robust retail rebound and promising economic prospects for that country.
With one of the lowest and declining Covid19 infection rates in the EU, a growing number of vaccinated residents, entertainment and schools reopened, and social gatherings resumed, Poland was returning to pre-pandemic normality, EPP chief executive Tomasz Trzósło said in the group’s pre-closing update.
By June 17, 26 million Covid-19 vaccine doses had been administered in Poland, and 42 percent of the population had received at least one shot.
Oxford Economics has forecast cumulative GDP growth of the EU’s sixth-largest economy at more than 8 percent by the end of next year.
“EPP operates in one of the strongest retail markets in Europe. All of this signals a rapid recovery after the recent pandemic wave, allowing us to look ahead with cautious optimism.”
He said customers flocked back to EPP’s retail assets immediately after trading restrictions were lifted on May 4, returning quickly to pre-pandemic social and economic lifestyles.
The strong rebound in retail was witnessed post each of the previous lockdown periods.
Recent market research showed that, in anticipation of shopping centres reopening, Poles actually held back spending, preferring to wait and purchase in stores.
“It is clear that Poles chose bricks-and-mortar retail to do their shopping. That is evident in EPP’s shopping centres, where tenant turnover continues to increase more quickly than footfall, and shoppers have bigger basket sizes now.”
In February, sales had already reached 99 percent of levels noted in pre-pandemic February 2020, despite a footfall of 71 percent.
In May this year, sales were 113 percent of May 2019 levels, with the footfall rate of 82 percent. May 2021’s top-performing categories by turnover compared to May last year were fashion and accessories (26 percent), household and appliances (21 percent) and specialty goods (9 percent).
Consumption was being driven by low and falling unemployment, rising wages and growing purchasing power.
Occupancy rates remain strong and stable at 95.5 percent in EPP’s retail portfolio. The strategy to reduce leverage by disposing of some assets through sales or joint-venture sales to new long-term-oriented partners remained a focus. However, a period of stabilisation in the retail environment was required to advance this strategy.
“For now, EPP can meet all its financial needs and has adequate liquidity for the period ahead,” said Trzósło.
EPP shares closed 1.38 percent lower at R10.70 on the JSE yesterday.