NLvalue schreef op 3 september 2020 23:20:
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Thanks - my roots lie in finance, with a heavy dose of experience on global retail , both off- and online..
To your question: trying to predict 1 answer for what the impact will be , is nearly impossible. However, defining a range of potential outcomes, is not.
Givens:
48% of the deals in France hasn’t been concluded
ECP has given 19,7 lease concessIons in Italy, Belgium,France
Those are straightlined over the duration of the remaining contract
They hit H2 2020 with 7 (= 14m annualized)
Hit 2021 : 6
Hit 2022: 3
Conclusion 1 : the lease concessions are primarily made to contracts expiring in 2020 and 2021 - to keep the centers full.
Assumption 1: France is 1/3 of the numbers above (Likely less)
Assumption 2: The 48% pertain mostly to longer duration leases .
With that - the base case In the range of outcomes is given : -3% in France in 2021, and -1,5% in 2022
From that base case - you develop more pessimistic outcome and you develop more optimistic outcomes
Those could get you to -15% if the outcome is nasty negotiations on the 48%, and ECP struggling to fill/renew the the leases expiring in 2020.
Or by 2022, the LFL reverts back to positive, as ECP replaces with tenants willing to pay more. Or strongly positive, if competitors go bankrupt and retailers flock to the strong.
You should assign your own probability to each potential outcome. With the (toughest) negotiations on the 48% still ongoing- it is too early to make firm predictions.