Immofinanz’s rental income in Q1 2020 rose by 13.4% to € 74.0 million, above all due to the expansion of the portfolio through acquisitions and completions as well as a growth of 1.9% in like-for-like rental income. The results of asset management increased by 18.1% to €59.5 million, and the results of operations were 18.0% higher at €43.5 million. However, the revaluation results of €-45.0 million from standing investments and goodwill reflect the adverse effects of the COVID-19 pandemic. Net profit for Q1 2020 was, therefore, negative at €-37.6 million.
“We started the year with a strong operational base and were able to benefit from our high-quality portfolio expansion. The Covid-19 crisis slowed this growth beginning in mid-March, but we are working steadily to master these challenges. By now, 79% of our retail space has already reopened. We want to emerge from this crisis even stronger and continue Immofinanz‘s growth course, whereby our focus will remain on the office and retail asset classes and on our brand strategy“, indicated Ronny Pecik, CEO of Immofinanz.
The real estate portfolio included 211 properties with a combined carrying amount of approximately €5.1 billion as of 31 March 2020. Most of these properties – 92.2% or €4.7 billion – are standing investments. Of this total, 64.7% are attributable to the office business and 35.2% to the retail business. The occupancy rate remained nearly constant at 96.4% (31 December 2019: 96.8%). The gross return equalled 6.1% based on IFRS rental income and 6.4% based on invoiced rents.
COVID-19 update
As previously announced, Immofinanz immediately introduced numerous measures at the start of the COVID-19 crisis to minimise the potential negative effects on the Group. These measures included, among others, the postponement of non-time-critical maintenance, the reduction of operating costs and similar expenses, the reduction of scheduled principal payments on bank financing, a universal stop for all property acquisitions currently under consideration and the evaluation of tax deferrals and tax savings. The liquidity position of €312.5 million at the end of March was also strengthened by the conclusion of an additional unsecured credit line of €100.0 million.
The legal regulations implemented to contain COVID-19 have been gradually lifted in recent weeks, beginning with mid-April in Austria, in nearly all countries where Immofinanz owns retail properties. At the present time, 79% of Immofinanz’s retail space has reopened. Romania represents an exception, where the four Vivo! shopping centres are still closed.
“We are also making very good progress on the conclusion of agreements with our major retail tenants to develop fair solutions for the crisis months and the reopening phase. However, it is still too early to estimate the effects of the pandemic. Due to our operating performance and our solid liquidity position and financing structure, we are well-positioned to handle the current challenges“, explained Dietmar Reindl, COO of Immofinanz.
A clear positive development in visitor frequency, above all in the retail parks, is visible in the retail properties that have recently reopened. With approximately 3.2 million visitors per week in the Stop Shop retail parks, the level reflects the beginning of the year. This development underscores the competitive advantage of the Stop Shop concept: one-stop shopping with direct access from the parking area to the individual shops and reduced possibilities for contacts.
