Real Estate Roundup – April 2020

In this issue

Performance – Property stocks took a hammering in March as the covid-19 pandemic took hold. The UK was put on lockdown to stop the spread of the coronavirus resulting in the enforced closure of many commercial real estate assets, including shops, restaurants, leisure facilities and hotels. The constituents of the top 10 best performing companies in price terms in March are all focused on real estate sectors that are less exposed to the impact of covid-19 and the lockdown. The top two, Assura and Primary Health Properties, both own portfolios of GP surgeries and their income is predominantly paid by the government. Unsurprisingly, the worst performing property companies in March are all massively impacted by the lockdown. Companies that have a large exposure to retail also saw heavy falls in their share price as shops were shut and some of their tenants unable to pay rent.

Valuation moves – Secure Income REIT reported the biggest NAV move in March, with a 7.6% rise in NAV in the full year to the end of December 2019. Other companies that also saw NAV rises included CLS Holdings, student accommodation groups GCP Student Living and Empiric Student Property and social housing REIT Triple Point. Once again, the retail-focused companies saw big falls in NAV. Shopping centre owners Intu Properties and Capital & Regional both saw huge falls in NAV.

Corporate activity – A host of companies announced the suspension of their dividend as a result of the impact of covid-19 and the lockdown. Companies included Empiric Student Property, NewRiver REIT, British Land, St Modwen, Hammerson and Shaftesbury.

Major news stories – Intu Properties said it would seek covenant waivers from its lenders as the impact of covid-19 hit its rental income. The group, which owns shopping centres in the UK and Spain, received just 29% of its rent for the quarter. Elsewhere, Civitas Social Housing acquired a portfolio of properties for £19.6m, which brought its run-rate dividend cover to 100%.

Edward Marten is MD of investor research company QuotedData. They provide free information for investors who find it hard to access high-quality, reliable, equity research on UK and European-listed companies. This is a QuotedData release.