PL

CEE REGION Atrium to speed up repositioning

Investment & finance
Atrium European Real Estate has managed to maintain a stable occupancy for its shopping centre portfolio in the region of 95.4 pct (down by only 1.6 pp) through its “focus on pro-active management” during the pandemic, according to an announcement of the company’s H1 figures

However, net rental income for H1 was down 22.8 pp to EUR 71.4 mln, although according to Atrium its NRI actually increased by EUR 0.7 mln once the EUR 12 mln impact of Covid-19 during the lock down period and the EUR 10 mln impact of net disposals are excluded.

Atrium’s EBIDTA was also down, by 24.4 pp to EUR 61.6 mln, as were its earnings from operational activities per share, which fell by 36.4 pp to EUR 9.8 mln. Its operating margin shrank by 5.8 pp to 90 pct.

At the moment, 92 pct of the group’s gla for Poland, the Czech Republic and Slovakia has re-opened, and including its shopping centres in Russia, 87 pct of the group’s gla is open (only one centre, in Russia, remains closed). Footfall in the first week of July reached 73 pct of the equivalent week in 2019, while June monthly sales were 77 pct of the figure for June 2019. Rent collections for H1 were 76 pct: 97 pct in Q1 and 53 pct in Q2.

The Covid-19 pandemic has had and continues to have an impact on our business. With the lockdown measures easing since early May and 87 pct of the portfolio now open for business, we are continuing to see a recovery towards pre-Covid levels. The quick action that we took, including proactively engaging with our tenants and shaping our debt maturities, coupled with the quality of our portfolio and the strength of our balance sheet have put us in a good position to tackle these challenges. We also take confidence from the fact that the governments in our key countries of operation responded quickly and decisively, leading to lower infection and fatality rates and in turn, an earlier easing of restrictions.
Liad Barzilai, the CEO of Atrium Group

Atrium is to significantly reduce its non-essential capital expenditure this year by app. EUR 15 mln (as well as a EUR 3 mln reduction in operational costs and EUR 2 mln in administrative costs). While around EUR 60 mln of planned redevelopment for 2020 has been postponed to 2022/2023.

Assets worth a total of EUR 75 mln were divested by the group in H1, including the Atrium Dubeň shopping centre in Žilina in Slovakia in January and five convenience centres in Poland in July, as Atrium continues to shift its focus onto its larger shopping centres in prime locations in Warsaw and Prague.

The crisis has accelerated many of the trends that were already impacting our sector and have been the driving force behind our strategy and portfolio repositioning over the past years. However, humans are inherently social creatures and we remain firm in our belief that our portfolio of urban centres serving their local communities’ needs still has an important place in the future for both retailer and consumer alike. We remain committed to our strategy of diversifying into the residential for rent sector in our key markets of Poland and the Czech Republic, which continue to benefit from strong underlying fundamentals despite the current global crisis. Finally, I would like to reiterate that the health and safety of our employees, customers and consumers remains our paramount priority in these difficult times.
Liad Barzilai

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