Shopping centre specialist Atrium European Real Estate saw its net rental income fall 21.3% in 2020 largely due to the impact of Covid-19 operational restrictions.
In a release to announce its 2020 full year results, Atrium said that a €49 mln cash impact of Covid-19 was partly offset by a €23 mln straight line of tenant support and government imposed reliefs. Even so, Atrium revealed a 30% drop in EPRA earnings as well as a 4.7% decline in the occupancy rate across its portfolio.
The company said that due to Covid-19 operational restrictions, its centres were closed for 30% of the time following the outbreak of the pandemic. Currently, only 86% of its centres are operational.
Atrium’s Central European assets devalued by 5.9% on a like-for-like basis over 2020, with a weighted average of 30 bps yield expansion over the year. Russia’s like-for-like assets devalued 17.8%, mainly due to the volatility of the Ruble which weakened by over 30% in 2020. As a whole, the Company recognised a like-for-like devaluation of 7.2% for its income producing assets, with over 90% of the contraction caused by change in yields due to market sentiment and volatility of the Russian Ruble.
The company took over €110 mln of cash conservation initiatives throughout the year in response to the pandemic, including reducing non-essential capital expenditure, postponing planned redevelopments and introducing a voluntary scrip dividend from the second quarter onwards. In February, it completed an Inaugural green bonds issue raising €300 mln, together with a buyback of €78 mln of 2022 notes, thus reducing the average debt cost and extending the maturity to 2.8% and 5.1 years, respectively.
The company also went ahead with a strategy to broaden its scope to residential assets, with plans to develop 800 apartments at Atrium Promenada in Warsaw.
'The Covid-19 pandemic significantly impacted people’s lives and businesses across the world, with shopping centres and retailers amongst the most affected and this is clearly reflected in the Atrium 2020 financial results,’ said Liad Barzilai, Chief Executive Officer of Atrium Group. ‘However, we were enormously encouraged by the fact that during those periods, when government restrictions were eased, footfall and sales levels rapidly returned to near pre-Covid-19 numbers, while online sales mirrored this pattern in reverse. As the vaccines are rolled out across the globe, there is cause for a renewed confidence as life hopefully begins to return to normal.’
