Lagoh shopping centre | Photo Collected From Lar España's Website
This increase is explained by the opening of the Lagoh shopping centre in September 2019 and the opening of shopping centre ÀnecBlau in June. The new rentals from these shopping centres breathed new life which allowed the REIT to face the losses caused by the lockdown of several businesses during the country’s state of emergency, but despite all that, if we exclude the additional rents generated by the Lagoh shopping centre, the revenues from the other shopping centres for the semester increased around 1.1%, are revealed by Lar España’s latest results.
To avoid the possible impact on future rents, Lar España reached agreements concerning around 90% of its shopping centres’ GLA. Nevertheless, the estimated impact on the full rental income for 2020 would be, until now, and taking into account all the finalised agreements, less than 3%.
José Luis del Valle, Lar España’s Chairman of the Board, remarked that the company is coming out of the pandemic reinforced. «The opening of the Lagoh shopping centre and the extraordinary modernisation of our shopping centres had a decisive influence on the increase in our revenues, despite the lockdown. These constant revenues provide us with a strong ability to resist in the short and long-term. Our shopping centres and retail parks are almost fully operational and are close to recovering the pre-crisis affluence levels. Furthermore, these are dominant shopping centres and retail parks located in strategic regional areas, where they are becoming the engines of the commercial recovery in their respective locations and areas of influence».
The company’s strong balance remains high, with a position close to 140 million euro after having paid 55 million euro in dividends concerning 2019. The recurring operating income reached 37.9 million euro, with a 41.9% increase and the recurring net profit reached 28.1 million euro, with a 65.5% increase when compared to the 17 million euro obtained during the first semester of 2019.
Nevertheless, Lar España’s portfolio valuation did not escape the impact of the crisis: the valuation from June 2020 is set at 1.506 million euro, which represents a 3.7% increase y-o-y, but a 2.9% decrease when compared to December 2019. The 55.9 million euro devaluation during the semester impacted its recurrent result for the period, which reflects losses of 28.7 million euro, which only affects the accounting, without impacting the cash flow.