JSE-listed real estate investment trusts (Reits) EPP and MAS Real Estate have started executing contingency measures following mandatory closures of large shopping centres in various parts of Europe, as governments try to curb the spread of Covid-19.
For example, the Polish government signed a decree on March 13 in terms of which all Polish shopping centres and retail locations measuring more than 2 000 m2 in size were to be closed for at least ten days, starting March 14, with the possibility of extended closure times if required.
Polish property developer EPP said the Polish government was working on a financial support package for companies operating in Poland and being impacted on by the virus contingencies.
EPP confirmed it was working with other retail landlords, the Polish Council of Shopping Centres, government and health authorities to provide feedback on the needs of the retail property sector.
The company anticipated that if closures continued for longer than the declared ten days, it would start to affect tenant operations and, therefore, the company was in discussions with all stakeholders to minimise negative impacts.
Poland’s legislated closure did not extent to grocery stores, pharmacies and cosmetic shops, which comprise about 21% of EPP’s retail portfolio in terms of gross leasable area.
EPP’s office portfolio also remains unaffected by new regulations.
Meanwhile, MAS’s contingency plans include having administrative staff working from home and limiting operational costs owing to restrictions on movement.
The company said it had started actions to preserve liquidity and enable staff to work from home on March 6.
MAS explained that it had sufficient liquidity to comfortably meet its financial obligations and see it through the period ahead, even it if would suffer revenue losses and postpone some planned asset sales.
MAS has properties across Europe, including in Poland, Bulgaria, Romania, Germany, Switzerland, the UK and Isle of Man.
Meanwhile, JSE-listed real estate investment trust Liberty Two Degrees (L2D) said although the South African government has not called on retail centers to temporarily close, businesses have been called upon to intensify hygiene control.
L2D has established a Crisis Leadership Team to direct its response to the Covid-19 pandemic and to promote the wellbeing of its community.
"The objective is to support our customers, tenants and service providers as well as safeguard our employees and assets. L2D is committed to contributing to society’s efforts to curb and slow the spread of the virus," the company stated.
L2D has implemented several measures including, with immediate effect, additional hygiene protocols throughout its portfolio. This is supported through visible and focussed communication on social distancing practices, which the company said will be updated as further information becomes available.
L2D’s board affirmed it would continue evaluating the impact of the virus outbreak on the business.