(Alliance News) - Globalworth Real Estate Investments Ltd on Thursday said it entered into agreements with tenants amid retail site closures in Poland and Romania due to government lockdowns to combat the spread of Covid-19.
The property firm said that while it does not anticipate a reduction in rental income from 50% of its retail tenants, it is in talks with the remainder 50% - which includes businesses such as restaurants - to find "appropriate solutions" as soon as their operations resume. It noted the majority of affected retail rental income comes from its three mixed-use assets in Poland which are Hala Koszyki, Renoma and Supersam.
Globalworth said while its office rental income has not seen a significant reduction, it has commenced discussions with tenants whose businesses have been hurt as a result of the pandemic.
The Bucharest-based company added that for certain tenants, it has agreed to near-term rent concessions or incentives in exchange for an extension of their leases.
For 2019, its portfolio generated over EUR190 million of contracted annual rental income with office rental income accounting for over 85%, retail contributing around 9%, logistics/light industrial accounting for 5%, and other rental income bringing in around 1%.
Globalworth said it has also implemented measures to maintain liquidity during the period of disruption. Measures include "substantially" reducing capital expenditure, suspending new investments, adjusting bonuses so they are now paid completely in shares, and scaling back its construction and development spend from EUR90 million to EUR54 million. Additionally, it has terminated, suspended or renegotiated supplier contracts to achieve "significant savings".
As at the end of 2019, the company had liquidity of over EUR290 million and has since improved its liquidity to over EUR550 million of available cash by drawing down on its bank facilities, it said.
Globalworth shares were untraded on Thursday morning in London, last quoted at EUR6.00 each.
By Ife Taiwo; ifetaiwo@alliancenews.com
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