Helical in good position to weather coronavirus crisis
A shoring up of Helical’s portfolio to focus on core assets in London and Manchester and its finances to reduce its leverage is enabling the landlord to weather the coronavirus crisis.
In a trading update, Helical said that measures taken over recent years, and the underlying strength of the markets that it operates in, meant it is well positioned for and confident in the long-term outlook for the business.
The group said it had reduced its leverage to 35% at 30 September 2019, giving it substantial headroom on its ICR and LTV covenants, that it had £64m of cash deposits available to deploy without restrictions and £65m of cash available by drawing down an extra £30m from its £400m revolving credit facility. The firm is also reviewing its capital expenditure and overheads to minimise cash outlays and to identify where cost savings can be made.
A shoring up of Helical’s portfolio to focus on core assets in London and Manchester and its finances to reduce its leverage is enabling the landlord to weather the coronavirus crisis.
In a trading update, Helical said that measures taken over recent years, and the underlying strength of the markets that it operates in, meant it is well positioned for and confident in the long-term outlook for the business.
The group said it had reduced its leverage to 35% at 30 September 2019, giving it substantial headroom on its ICR and LTV covenants, that it had £64m of cash deposits available to deploy without restrictions and £65m of cash available by drawing down an extra £30m from its £400m revolving credit facility. The firm is also reviewing its capital expenditure and overheads to minimise cash outlays and to identify where cost savings can be made.
Helical said it had been largely unaffected in terms of rent collection at quarter day, with 84% of rent due being paid by 31 March. A further 9% will be paid in instalments over the next three months. Some 90% of service charges were also paid.
The group said it had been positively engaging tenants and had agreed monthly rental concessions with those in financial difficulty and a three-month deferment for its food and beverage tenants. F&B occupiers make up just 1.4% of the group’s total passing rent.
Helical said that it did not expect earnings for the year to be affected by the current crisis, but that portfolio valuations might be following RICS guidance to include a material uncertainty clause in independent valuations.
“If this crisis is short-lived, then we can hope that the measures the government and the Bank of England have put in place will ensure a strong bounce back as investor confidence returns. In the meantime, we must prepare for a potentially prolonged period of lockdown as the government seeks to contain and ultimately defeat the Covid-19 pandemic,” said chief executive Gerald Kaye.
“Helical has a portfolio of high-quality, prime offices in London and Manchester which are 83% let to a diverse range of tenants. Our main focus during the coming months is to ensure that our staff remain safe, our liquidity and finances remain strong, our assets are secured and well maintained, and we protect the future of the business.”
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