EPP reveals ‘encouraging recovery’ after second Covid-induced lockdown in Poland

10th December 2020

By: Simone Liedtke

Creamer Media Social Media Editor & Senior Writer

     

Font size: - +

JSE-listed EPP on December 10 revealed an “encouraging recovery” for retail and the continued strengthening of its operational resilience.

Poland emerged from a second three-week Covid-19 lockdown on November 28, which marked the start of a robust return to shopping at EPP’s centres. Footfalls for December to date have recovered to 76% of 2019 levels, supporting EPP’s strong and steady operational recovery.

Nearly 90% of the EPP portfolio’s gross lettable area (GLA) is currently trading, while the average tenant turnover from July to October returned to the level of 90% for the same months in 2019, and December 2020 turnover looks set to reach 90% or more of December 2019 levels.

The company noted that its average portfolio occupancy remains stable at the robust pre-lockdown level of 96%, and that from June to end-September, EPP extended its weighted average lease term by GLA from 4.7 years to 5.4 years.

All lease negotiations applied for by tenants have been concluded, and rental collection rates were more than 95% of the discounted rental levels for an average of four months before November’s lockdown (July through to October 2020).

EPP also continued to secure new store openings from some of the biggest names in retail, including Sephora, Hebe, 50 style and Martes Sport, besides others.

EPP’s tenant base comprises a nearly equal split of international retailers and Polish retail chains, and tenants in the EPP portfolio have a record of outperforming average sales on the Polish market.

The second three-week lockdown has been much less severe for EPP than the first one, which lasted for seven weeks from March 14 until May 3. As it was shorter and not as restrictive as the first lockdown, the second lockdown saw roughly 10% more GLA allowed to remain open in November.

Polish shopping centres were also able to reopen after only three weeks of the country’s second lockdown because they have proven to provide safe, sanitised environments for shoppers and staff alike, the company said.

“EPP’s strict sanitary and safety regimes go well beyond what is required by law. Because of the proactive response of the entire retail community in Poland, including many landlords, retailers and industry associations, the Polish government allowed malls to open in time for the critical festive trading period, which has become even more important for the retail industry in 2020 given the significant impact of Covid-19,” EPP commented.

“We were pleased with the recent reopening of the shopping centres in Poland and happy to confirm that, as a result, EPP remains on track to deliver full-year earnings of [between] €4.75 and €5.25 per share in line with previously provided guidance,” EPP CEO Tomasz Trzósło said.

The company further remains optimistic that the vaccination programmes that will be made available to the public in Europe in early 2021 will help to “efficiently defeat the virus and enable the return of a stable operating environment next year and beyond”.

The Polish government has also provided various support programmes, topping €70-billion, some directed at retailers including cost subsidies. Additional support has been provided with added trading Sundays, as retailers in Poland would normally only trade on two Sundays before Christmas, but this year trading has been increased to three Sundays in December to support retailers and enable safer shopping across more days.

Even though Poland, like most European countries, has experienced relatively high rates of new Covid-19 cases in the recent weeks, it is expected to be one of the least impacted economies in Europe in the next 12 months.

Forecasts estimate that Poland will be among the few European economies to show positive average gross domestic product growth for 2020 and 2021.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION