The number of property companies issuing profit warnings in Q1 2020 nearly matched the number of profit warnings flagged during the whole of 2019, new research shows.
There were 301 profit warnings issued in Q1 2020, compared to 313 profit warnings issued over the whole of last year, according to EY’s latest Profit Warnings Report.
Sixteen of the profit warnings issued in Q1 2020 were made by FTSE companies, double the amount recorded in the whole of 2016 (6).
All warnings issued in Q1 2020 cited the impact of coronavirus.
Fraser Greenshields, partner and EY’s corporate finance leader in the UK & Ireland, said: “2020 was always going to be a testing year for a significant element of the real estate sector, especially those exposed to the increasing strain on retail and leisure tenants. The impact of Covid-19 has significantly amplified the pressure and added new stresses.
“Most REIT profit warnings have unsurprisingly come from companies exposed to the retail, hospitality and leisure sectors, where we have also recorded the largest drop in rent collections. There is also a cluster of warnings in student accommodation, where major providers have waived final term fees, putting pressure on others to follow suit.”
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