Arrowhead has released its pre-close market update before entering its closed period from the 1st of October 2020.
In the sixth month of the pandemic, the listed company’s collections are trending in the right direction and overall tenant retention for the period – including new letting and expiring space during this period – remains healthy at approximately 85%.
Mark Kaplan, CEO of Arrowhead Properties says that it is heartening to see the positive trend in collections as a percentage of contractual rental increase from 77.6% in April to 90.0% at the end of August 2020.
“It was important to us from the word go to work closely with our tenants to navigate through this together. To this end we have provided rental relief in the form of rental discounts and deferrals to assist tenants whose operations have been impacted by the COVID-19 pandemic and the national lockdown amounting to R70.9 million as at the end of August 2020. The level of relief has decreased since July 2020 and we remain engaged with our tenants” he comments.
Arrowhead’s sales program continues to exceed expectations with a further nine properties sold for approximately R270 million, taking the overall sales to over R1.26 billion for the current financial year. The disposals have a positive impact on the company’s LTV (Loan to Value) ratio which remains well within current covenants.
Kaplan says the continued strengthening of the balance sheet through the sale of selected assets and the reduction of debt, remains a key focus for Arrowhead: “Our cash on hand, including undrawn facilities, has increased to R518 million and our balance sheet is strong. We are confident that our portfolio is well positioned with good retail assets well placed for convenience shopping within areas linked to transport nodes, high demand industrial assets that caters for small to medium manufacturing and distribution as well as offices that offer existing and potential tenants value in a difficult environment”.
“Our team has worked very hard despite unprecedented circumstances and a continuous changing environment. I commend them for their continued perseverance and outperformance,” he concluded.