MAS sticks to disposal plan despite Covid-19

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MAS sticks to disposal plan despite Covid-19

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Published Date: 2020-08-31 | Source: Stephen Gunnion | Author: Stephen Gunnion

MAS sticks to disposal plan despite Covid-19

The European real estate company says while the pandemic hampered disposals, it is proceeding with the sale of Western European assets.

MAS Real Estate says says plans to sell the remainder of its property investments in Western Europe and redeploy its funds into Central and East European (CEE), where it sees better prospects, have been hampered by Covid-19 uncertainty. While the disposals remain a strategic priority for the real estate company, it says purchasers adopted a wait-and-see approach during lockdown and some deals fell through.

That said, it managed to sell its Zurich warehouse last month for 38.5 million Swiss francs, which should lead to a net cash inflow of €19 million (R376 million) by the end of next month. It aims to dispose of €311 million of additional property by the end of the year, with more sales to follow over the following two years.

Releasing its annual results, MAS said its financial year comprised two distinct stages as management re-positioned the business through the disposals. Operations were strong until the end of February before trading conditions and prospects deteriorated as countries went into lockdown and non-essential retailers at its shopping centres were forced to cease trading.

The group's CEE properties were particularly affected, with footfall declining by 51% and sales falling 48% over the March to June period before recovering in July. Just under a quarter of rental income was generated by tenants with uninterrupted trade who were invoiced normally. In Western Europe, a large proportion of essential tenants, single tenant retail assets and shops had exterior entrances and were less affected by trading restrictions. Almost 79% of rental income was from tenants with operations unaffected by the pandemic.

MAS recorded an adjusted total loss of €85.5 million for the six months to end-June, resulting in a loss of €39 million for the full year. It recorded €44.1 million of negative fair value adjustments to income property, mostly attributable to its CEE portfolio. Adjusted distributable earnings for the second six months declined to 3.11 euro cents from 4.24c in the previous six-month period. After paying an interim cash dividend of 4.24c, it has declined to declare a final dividend.





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