Listed retail landlord quantifies rent loss from Covid-19 lockdowns

Investore owns Bunnings properties. Photo / File

Listed retail property investment specialist Investore Property could lose up to $2 million rent from its tenants due to lockdowns from the pandemic this year.

The business, which has $895 million of property, today told shareholders it "expects the impact of Covid-19 to result in reduced gross rent receivable for FY21 of about $1m to $2m, assuming alert level 3 or 4 restrictions are not in place for an extended period during the balance of FY21."

The company held an annual general meeting online today and said Countdown pays about 63 per cent of its total annual rental income, Bunnings 12 per cent, Foodstuffs 5 per cent and the rest comes from Mitre 10, The Warehouse Group, Briscoes Group and NZ Post.

Investore says its portfolio includes many essential businesses - supermarkets, pharmacies and hardware stores, "a vital part of the supply chain for New Zealanders".

A limited number of leases permit tenants to suspend or abate rental payments as a result of Government alert level restrictions. Investore has largely completed tenant negotiations in relation to the first lockdown period, it said.

Recent deals include selling Countdown Dunedin South for $19.3m, buying Countdown New Brighton for $5.75m, land adjacent to Countdown Papakura for $1.2m, buying Bunnings Carr Rd in Mt Roskill for $48.5m, a Mt Wellington shopping centre for $39.25m and Bay Central shopping centre for $53m.

Chairman Mike Allen told shareholders the share price was relatively resilient due to the business owning large-format retail properties, some of which were regarded as essential during the lockdowns this year.

Investore had bought large-format retail properties from Stride during FY20 for $140.7m. It now has 43 properties with 130 tenants.

The business says it is now aiming for targeted growth to enhance the portfolio and maximise returns to investors over the medium to long term

The company said it was keeping a close eye on the effects of the pandemic, "seeking to minimise the impact to Investore's business, while also assisting tenants to maintain profitable, sustainable businesses".

Investore plans to continue to invest in refurbishment of stores and has given dividend guidance for FY21 at 7.60cps, "assuming no further deterioration in economic conditions due to Covid-19".

Shares were today trading at $2.22 and the company's market capitalisation is $817m.