- Net rental income in Q3/2021 was 51.3 MEUR and increased by +0.4% compared to Q3/2020 on like-for-like basis.
- Q3/2021 is the third consecutive quarter with quarter over quarter net rental income growth while the net rental income is close to pre-covid levels.
- The disposal of Columbus, a non-core asset, at gross pricing of 106.2 MEUR vs. valuation of 96.3 MEUR in Q4/2020. Consider to use some of the proceeds to repurchase shares.
- Rent collection for YTD stands currently at 96 %, Q3/2021 currently at 96% and Q2/2021 at 97%
- Like-for-like tenant sales 2.2% above previous year level and only -1.4% below comparable pre-covid levels in 2019.
JULY--
- Net rental income was 51.3 MEUR (Q3/2020: 52.9). The decrease was primarily due to the divestments made in Q1/2021. Stronger currencies increased net rental income by 0.8 MEUR. On a like-for-like basis, net rental income increased by 0.4% compared to previous year.
- EPRA Earnings decreased to 32.5 MEUR (33.5) due to divestments and lower direct share of profit of joint ventures and associated companies, which were compensated by lower direct financial expenses. EPRA Earnings per share (basic) was
- Adjusted EPRA earnings were 24.9 MEUR (29.4) and were impacted by the newly issued hybrid bond coupons.
- IFRS-based earnings per share was
JANUARY--
- Net rental income was 152.5 MEUR (Q1-Q3/2020: 155.5). The quarterly trend is positive as Q3/2021 net rental income exceeds Q2/2021 levels. Net rental income continued to be affected negatively by COVID-19 pandemic and its impact on vacancy, as well as straight-lined discounts from 2020. Higher property operating expenses also decreased the net rental income. However, there was positive development in specialty leasing.
- EPRA Earnings were 96.8 MEUR (104.5) as a result of higher direct financial expenses due to hybrid issuance and lower direct share of profit of joint ventures and associated companies. EPRA Earnings per share (basic) was
- Adjusted EPRA earnings were 80.1 MEUR (92.4) due to hybrid bond coupons.
- IFRS earnings per share improved to
KEY FIGURES
Q3/2021 | Q3/2020 | % | FX Adjusted % 1) | |||
Net rental income | MEUR | 51.3 | 52.9 | -3.1 % | -4.5 % | |
Direct Operating profit 2) | MEUR | 44.7 | 47.1 | -5.1 % | -6.5 % | |
IFRS Earnings per share (basic) 3) | EUR | 0.01 | 0.00 | - | - | |
Fair value of investment properties | MEUR | 4215.3 | 4155.1 | 1.4 % | - | |
Loan to Value (LTV) 2) 4) | % | 39.6 | 46.8 | -15.3 % | - | |
EPRA based key figures 2) | ||||||
EPRA Earnings | MEUR | 32.5 | 33.5 | -3.0 % | -4.6 % | |
Adjusted EPRA Earnings 3) | MEUR | 24.9 | 29.4 | -15.2 % | -16.8 % | |
EPRA Earnings per share (basic) | EUR | 0.183 | 0.188 | -3.0 % | -4.6 % | |
Adjusted EPRA Earnings per share (basic) 3) | EUR | 0.140 | 0.165 | -15.2 % | -16.8 % | |
EPRA NRV per share | EUR | 11.58 | 11.32 | 2.3 % | - | |
Q1-Q3/2021 | Q1-Q3/2020 | % | FX Adjusted % 1) | 2020 | ||
Net rental income | MEUR | 152.5 | 155.5 | -1.9 % | -4.3 % | 205.4 |
Direct Operating profit 2) | MEUR | 133.7 | 137.3 | -2.6 % | -5.1 % | 180.4 |
IFRS Earnings per share (basic) 3) | EUR | 0.32 | -0.18 | - | - | -0.25 |
Fair value of investment properties | MEUR | 4215.3 | 4155.1 | 1.4 % | - | 4152.2 |
Loan to Value (LTV) 2) 4) | % | 39.6 | 46.8 | -15.3 % | - | 46.9 |
EPRA based key figures 2) | ||||||
EPRA Earnings | MEUR | 96.8 | 104.5 | -7.4 % | -10.1 % | 136.6 |
Adjusted EPRA Earnings 3) | MEUR | 80.1 | 92.4 | -13.3 % | -16.1 % | 120.3 |
EPRA Earnings per share (basic) | EUR | 0.544 | 0.587 | -7.4 % | -10.1 % | 0.767 |
Adjusted EPRA Earnings per share (basic) 3) | EUR | 0.450 | 0.519 | -13.3 % | -16.1 % | 0.676 |
EPRA NRV per share | EUR | 11.58 | 11.32 | 2.3 % | - | 11.48 |
1) Change from previous year (comparable exchange rates). Change-% is calculated from exact figures. |
2) |
3) The adjusted key figure includes hybrid bond coupons and amortized fees. |
4) Highly liquid cash investments have been taken into account in net debt. |
CEO
On the transaction front, the Nordic real estate transaction market has continued to be very active with a great deal of both domestic and foreign capital flooding the space and cap rates continuing to compress. One trade of note this quarter was the recently announced
Speaking of valuations, post quarter end, we agreed to sell our Columbus shopping centre in
These development opportunities will provide significant organic growth for us going forward, particularly on the residential front and serves to enhance and improve our existing hubs. As we have stated previously, increasing the densification and diversity of our urban hubs improves both the stability of our existing assets while providing to excellent growth and value enhancement from the newly developed buildings coming online. The first milestone of this strategy is our exciting Lippulaiva project (opening spring 2022), which includes in total approx. 550 apartments and will bring our existing residential component of the portfolio to 2.8% of our total GLA.
On the operating front, like-for-like tenant sales have picked up year-to-date and now stand at 2.2% above the same period last year. Once again, it is worth noting that we are seeing like-for-like tenant sales reaching pre-covid levels, which we believe sets us apart from our retail peers and is a testament to our strategy of owning necessity-based retail in growing locations with access to excellent public transportation. This is evident in tenant demand for our urban hubs as we continued to demonstrate strong leasing activity in the quarter with approximately 41,000 square meters leased. We are particularly pleased with the improvement in specialty leasing, which has shown significant growth recently as tenant interest in pop-ups and common area leasing has dramatically picked up in line with the economic recovery. Specialty leasing is an important operational initiative for us as it offers not only additional income and new GLA but also serves as an important 'farm system' to find, identify and build a relationship with tomorrow's long-term tenants.
As has remained the case throughout the pandemic, Citycon´s non-adjusted rent collection remained at a high level, and stands at 96%, year-to-date. Final collection rates are again expected to increase beyond this already high level. We would also note that this strong level of collection continues to be a result of our necessity-based tenant focus, in addition to our excellent Nordic city locations.
Continuing with the balance sheet, we announced our intentions in September to redeem the 161.7 MEUR remaining on our senior notes maturing in 2022. In addition, we redeemed nearly all of our outstanding CP and now have no significant near-term maturities until 2024. This additional balance sheet strength provides us the ability to pursue our long-term strategic goals.
We believe the company is well positioned for today and our future, as demonstrated by our solid Q3 results. We continue to demonstrate the strength of our strategy, focusing on necessity-based retail hubs in top Nordic locations. Our tenant mix, of municipal and grocery anchor tenants, brings resilience to our portfolio, which distinguishing against our more fashion-oriented peers through the pandemic and should continue to do so going forward. This stable cash flow combined with the significant value creation associated with our development pipeline provides an attractive value proposition for all stakeholders. Finally, we were pleased to see the lifting of government restrictions in our operating countries in September, which gives us confidence for the rest of the year. As a result of our year-to-date results, confident in tightening our full year guidance and now anticipate EPRA EPS to be in the range of
OUTLOOK 2021 SPECIFIED
Previously | |||
Direct operating profit | MEUR | 173-180 | 173-184 |
EPRA Earnings per share (basic) | EUR | 0.683-0.723 | 0.676-0.726 |
Adjusted EPRA Earnings per share (basic) | EUR | 0.558-0.598 | 0.558-0.608 |
The outlook assumes that there are no major changes in macroeconomic factors and that there will not be another wave of COVID-19 with restrictions resulting in significant store closures. These estimates are based on the existing property portfolio as well as on the prevailing level of inflation, the EUR-SEK and EUR-NOK exchange rates, and current interest rates.
AUDIOCAST
Conference call numbers are:
Participants from
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For more investor information, please visit the company's website at www.citycon.com.
Board of Directors
For further information, please contact:
Executive VP and CFO
Tel. +358 50 557 9137
eero.sihvonen@citycon.com
Vice President, Strategy & Investor Relations
Tel. +358 40 823 9497
laura.jauhiainen@citycon.com
www.citycon.com
https://news.cision.com/citycon-oyj/r/citycon-oyj-s-interim-report-for-1-january-30-september-2021--continued-strong-operational-and-capit,c3442138
https://mb.cision.com/Main/13399/3442138/1487664.pdf
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