CEE shopping centre developer Atrium European Real Estate reported lower earnings for the first nine months of 2015 as rental income continued to be hit by the economic downturn in Russia.
CEE shopping centre developer Atrium European Real Estate reported lower earnings for the first nine months of 2015 as rental income continued to be hit by the economic downturn in Russia.
Gross rental income fell to €155 mln from €160.2 mln in the year-earlier period, while net rental income amounted to €147.4 mln, down from €153.4 mln a year earlier. Excluding Russia, the group’s NRI increased by 7.0%.
Atrium said the decrease in income mainly reflected ‘tactical rental discounts’ provided to tenants in the group’s Russian portfolio in an effort to protect occupancy levels as the economic situation in Russia ‘remains challenging’.
The operating margin in Atrium’s core markets of Poland, the Czech Republic and Slovakia remained strong at 97.7%, while overall margins fell slightly from 95.8% to 95.1% despite the adverse performance in Russia.
Atrium said its Russian portfolio (including land and development) was devalued by €96 mln in the first nine months of the year. This was partly offset by a revaluation of €28 mln resulting from yield compression in other markets.
Commenting on the results, group CEO Josip Kardun said: ‘The optimisation of the group’s portfolio remains our firm priority and we have continued to work hard towards this goal through the acquisition of a prime asset - Arkády Pankrác shopping centre in Prague, the strategic disposal of non-core assets, maintaining occupancy in Russia and our key development project at Atrium Promenada in Warsaw. In addition, we focused on our strategy of building a stronger and more efficient capital structure for the group as well as significantly improved liquidity.’