by Property Forum | Report

Globalworth’s revenue and net operating income rose by 9.9% to €114.0 million and by 17.1% to €79.6 million as compared to H1 2019, respectively, mainly due to the acquisition of standing properties in Poland and completion of the development of properties in Romania. Globalworth has published its interim results for the six months ended 30 June 2020.


Dimitris Raptis, Co-Chief Executive Officer and Chief Investment Officer of Globalworth commented: "2020 has been a year of significant challenges, with a first-quarter full of optimism and strong performance coming to an abrupt halt in March due to the COVID-19 pandemic. However, since the very early days of the pandemic we have taken measures in Poland and Romania, aimed at ensuring not only the maximum possible protection for all parties concerned but also business continuity and long-term viability. I am proud to say that our proactive approach and, in certain cases, assertive measures, have been in the right direction and have placed us in the best possible position to emerge stronger in due course and a relative winner from the current turbulent times."

Operational highlights

  • Total combined portfolio value remained effectively unchanged at €3.0 billion mainly due to the positive impact from developments (delivered or in progress) offsetting most of the revaluation decrease due to the COVID-19 pandemic.
  • Standing portfolio footprint increased by 34,800 sqm mainly attributed to the addition of Globalworth Campus T3 in Bucharest, to 1,248,500 sqm of GLA.
  • The green-certified portfolio increased to 48 standing properties at the end of June accounting for 83.8% of standing commercial portfolio by value.
  • Developments focused on projects with significant pre-lets or advance level of construction, with two Class A office projects and two industrial facilities under construction in Romania (3 projects) and Poland at the end of June, which upon completion are expected to add 91,500 sqm of GLA.
  • Healthy leasing activity in H1 2020, with 115,500 sqm of commercial space taken-up or extended at an average WALL of 3.2 years.
  • Leases renewed accounted for 74% of leasing activity, resulting in Globalworth’s WALL remaining substantially the same over the period (4.5 years as at 30 June 2020 vs 4.6 years as at 31 December 2019).
  • Average standing occupancy of the company’s commercial portfolio of 93.3% (94.2% including tenant options), decreasing from 94.7% (95.0% including tenant options) at year-end 2019. Like-for-like occupancy decreased by 0.8%.
  • Majority of portfolio internally managed, with 83.6% of standing commercial portfolio by value (87.6% of office and mixed-use standing properties) managed in-house by a team of over 200 professionals in Poland and Romania, with new properties being added in Q3 2020.
  • Most of Globalworth’s contracted rent is from office and industrial properties (89.9% of annualised contracted rent) which have remained largely unaffected by measures taken by the authorities against Covid-19.
  • Claims received principally by occupiers of space who have been impacted by the COVID-19 pandemic, with claims accounting for 4.2% of annualised contracted rent received and settled with tenants and further claims accounting for 0.8% of annualised contracted rent rejected or under negotiations.
  • The modest economic impact of claims is expected to be substantially mitigated by the cost-cutting initiatives already implemented by the Group and through the extensions of leases in place negotiated as part of the COVID-related agreements reached with our tenants. 
  • Rate of collections for rents invoiced and due remained high at 95.5% during the first half of 2020.
  • CPI Property Group became the largest shareholder in Globalworth in February 2020.
  • Over €650,000 donated in the fight against Covid-19 in Romania and Poland.

Financial highlights

  • Revenue and net operating income rose by 9.9% to €114.0 million and by 17.1% to €79.6 million as compared to H1 2019, respectively, mainly due to the acquisition of standing properties in Poland and completion of the development of properties in Romania after 1 January 2019.
  • Adjusted normalised EBITDA for the period increased by 16.1% to €71.5 million, following the increase in NOI.
  • Loan to Value of 36.9% at 30 June 2020, up from 34.7% at 31 December 2019, consistent with the Group's strategy to manage its long-term LTV target at below 40% while still pursuing strong growth.
  • Issue of inaugural Green Bond in July, raising €400 million with a 6-year term (coupon 2.95%), in a transaction which was twice oversubscribed.

Outlook

Globalworth will continue to actively manage its portfolio in Poland and Romania while respecting the regulations and recommendations issued by the World Health Organisation as well as national, regional and local governments and adapt its operations accordingly. At the same time, should new attractive opportunities become available, the company is prepared and has the financial resources to act quickly.