Bahía Sur Shopping Centre in Cádiz, owned by Castellana Properties
During the presentation of the results for the first tax semester of 2020 – which begun in April and ended in September –, Castellana Properties revealed that its Gross Rental Income, excluding income related to the portfolio operating expenses recoverable from tenants, stood at 15.2 million euro (-46% y-o-y). This number is explained by the «decrease caused by the Covid-19 effect during H1FY21, mainly related to rental discounts agreed with tenants to relieve the effect of Covid-19 by supporting our tenants. These discounts were given in exchange for more favourable lease terms», revealed the REIT in the document.
Castellana Properties reached agreements with 82% of its tenants and around 8% are under very advanced negotiations. Amongst the measures agreed upon and thanks to its active management, the company was able to expand the duration of the leasing contracts on its retail assets, based on its minimum guaranteed rent, in around 5.6% going on average from 10.6 to 11.2 years. During the last few months, «Castellana Properties has kept boosting the activity on its assets and moved forward with a wide range of promotions and animations to support the tenants, as well as expanding terraces and creating new open-air areas, always complying with the strictest safety and hygiene measures required by the current situation», can be read in a release.
Besides this drop, Castellana Properties also witnessed the pandemic impact the value of its 18 asset portfolio. Its Gross asset value was 994 million euro at the end of September 2020 (-1.0% than in March 2020) adjusted for Covid-19 effect and accumulated GAV adjustment of -3.4% on September 2019.
Thus, the Group’s consolidated net results for the 6-month period which ended on 30 September 2020 amounts to -18.9 million euro, including -21.2 million euro of changes in FairValue based on IFRS accounting principles reflecting the Covid-19 effect. Nevertheless, Castellana Properties assumed that it «expects to revert most of this situation, since the discounts will decrease».
He further added that «the company’s net value is set at around 473 million euro, with a net loan to value (LTV) of 47.56%. The results obtained show the company’s excellent positioning on the market and its potential, the reason why Castellana Properties expects to recover 100% of its usual economic activity once the pandemic ends to keep expanding its business in the country».
Alfonso Brunet, Castellana Properties’ CEO, assured that «the shopping centres have proven to be safe places where the incidence of Covid-19 has been residual, as shown by the affluence and sales numbers we registered during these last few months with a recovery above what was expected and with no registered infection up until now. Our bet on extending our hand to all our tenants and to move away from the mere tenant-landlord relation is paying off and the occupancy rates on our assets have grown and reached 98.5%. 0nce we overcome the pandemic; we are convinced the revenues from our shopping centres will recover 100% in a few weeks».
