LondonMetric has said it will pay out its third quarter dividend, as it holds talks with a minority of its occupiers that are struggling.
EPRA earnings for its 2020 financial year are expected to remain in line with expectations. Its Q3 dividend of 2p per share will be paid out on 16 April.
The company collected 85% of Q1 rents from its occupiers. A further 7% is expected to be received “shortly”.
It is in advanced discussions on short-term rental concessions on another 4%, in return for compensatory asset management initiatives. Around 70% of LondonMetric’s portfolio is focused on logistics.
The company said that after these discussions, it expects 17% of rent will be paid monthly, up from 13%.
“Unsurprisingly, some of our customers are experiencing unprecedented short term disruption to their business models, which is putting enormous pressure on the robustness and sustainability of their cash flows,” the company stated.
“Clearly this will have some impact on our short term cashflows. However, where any liability is deferred, it still remains due and so we will expect compensation by way of lease extensions, removal of break clauses or additional payments in the future.”
In H2, LondonMetric made £174m of disposals, of which its share was £167m. It closed £106m of these, including the Dixons Carphone warehouse in Newark, a DFS unit in Nottingham and an office park in Worcester. The remaining sales are unconditional and scheduled to complete by the end of June.
Over the same period, it bought £50m of long-let assets with a WAULT of 19 years.
As at 31 March 2020, the company had £134m of undrawn facilities and £81m of cash on its balance sheet. It recently secured a new £75m unsecured revolving credit facility for a three-year term with HSBC at an opening margin over LIBOR of 150bps.
Compared to 30 September 2019, valuations would need to fall by around 32%, or rent would need to fall by some 58%, before testing the covenants on its facilities.
The company said: “Looking forward, it is still too early to assess the full impact of Covid-19 on both the wider economy and the real estate industry.
“The tectonic plates have undoubtedly shifted for most businesses, and while we expect them to realign back, for many, they are unlikely to return to exactly where they started.”
To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette
