The covid-19 pandemic has had a devastating effect on the share price of property companies, with 31% wiped off the value of their total market capitalisation during the first quarter of 2020. Companies focused on the retail, leisure and hospitality property sectors were particularly badly affected as the country was put on lockdown in an effort to halt the spread of the disease. Later in the quarter, the extent of the problem for property companies was revealed with rent collection announcements. Some retail-focused companies had collected below 50% of rent and service charge during the quarter… Read more
It wasn’t just the retail, leisure and hospitality sectors that were affected. Office landlords saw their rental income fall as tenants moved business operations remotely. The industrial sector was also impacted, but to a lesser degree due to the spike in demand from ecommerce tenants. The huge hit on rent collection saw companies rush to shore up their balance sheets and many have suspended dividends. There were a handful of companies that did emerge from the quarter unscathed. Healthcare property companies, whose income is backed by the government, all saw a slight increase in their share prices over the period.
In this issue
Performance data – Only a handful of companies saw their shareprice rise in the quarter. Companies with stable income streams wereamong the best performing.
Corporate activity – Covid-19 put paid to a number of plannedcapital raises during the period. However, more than £330m wasraised, with Grainger accounting for more than half of that.
Major news stories – The coronavirus pandemic dominated the headlines with several companies suspending dividend distributions amid a stark drop off in rent collection.