5 August 2021 12:40

Results as at 30 June 2021: challenging half but with positive signals

  • Strong rebound in June, first full month without restrictions, which confirms the validity of the business model: retailers’ sales +0.3%, average ticket +20.3% and 85% of footfalls recovered vs June 2019
  • Rent collection 1H 2021: in Italy around 83%[1]; in Romania around 93%
  • Financial occupancy higher vs FY 2020: Italy 95,3%, +100bps; Romania 94.3%, +70bps
  • Net rental income: €55.5 million (-1.4%); FFO: €30.6 million (-6.8%). Both reflect the net direct impact of Covid-19 for €7.8 million[2]
  • Loan-to-Value falls to 49.1%; cash generation reaches €20 million in the half
  • EPRA NRV of €10.56 per share (+1.7%)
  • Market value of freehold properties: €2,267.88 million (lfl Italy +0.10%; lfl Romania -0.8%)
  • FY FFO guidance revised upward to +7/8% (compared to +3/4%)
[1] % of turnover net of rebates and credit losses
[2] Includes temporary rebates of €0.3 mn, credit losses of €7.4 mn, net of lower rents payable


Today, in a meeting chaired by Rossella Saoncella, the Board of Directors of IGD – Immobiliare Grande Distribuzione SIIQ S.p.A. (“IGD” or the “Company”) examined and approved the interim financial report at 30 June 2021.


Message from the Chief Executive Officer, Claudio Albertini

“The financial results recorded in the first six months of the year were still impacted by the prolonged restrictions which limited shopping centers’ operations beginning last fall, contrary to 2020 when the first 2 months were not affected by Covid-19 at all as the first restrictions were in place only as of the end of February.  Regardless, the trend seen beginning mid-May, when the main restrictions were eliminated, is very positive and allows us to look forward to the second half of the year with confidence: in June footfalls and retailers’ sales showed decided improvement against 2020, rising +8.2% and +17.4% respectively, but sales were also 0.3% higher than in 2019 with a marked increase in the average ticket which once more confirms consumers’ greater propensity to buy.  Commercial activity was also very lively, with a greater number of openings and inaugurations which caused occupancy to rise 100 basis points in Italy and 70 in Romania.

We are well aware that the challenges posed by the pandemic and beyond will continue to be considerable, but we are confident in the second half and the next few years during which we expect our results to improve if these trends are confirmed and our centers’ operations are not impacted by further restrictions”.




In the first six months of 2021 IGD’s performance was still inevitably impacted by the restrictive measures adopted by the Italian government in response to the Covid-19 health crisis.  The operation of the Group’s shopping centers was, in fact, limited considerably through 17 May with a ban on table service for restaurants and the closure of non-essential retail operations located inside shopping centers on Sundays and holidays (the non-essential retailers were closed about 36% of the possible days of operation versus around 39% in the first half of 2020). These limitations, together with the restrictions on personal mobility, impacted both footfalls and retailers’ sales in the first six months of the year which were higher than in the first six months of 2020 (footfalls +10.3%; sales +23.4%), but still lower than in 2019, which was not impacted by the pandemic (footfalls -29.4%; sales -24.5%).


Beginning, however, on 17 May when the restrictions were eased, shopping centers became fully operative with a trend that showed continuous improvement:  in the week 17-23 May, the first in which all the retailers inside the shopping malls were allowed to stay open (including on Saturday and Sunday), footfalls were 32% higher than in the same week of 2020 (18-24 May 2020, which was the first week of post-lockdown reopenings in Italy) and around 10% lower than in the same period of 2019. Even more significant are the results recorded in June, the first full month without restrictions, when footfalls rose 8.2% and sales posted an even higher increase of 17.4% (June 2021 vs June 2020).  The June performance is even more compelling if compared with the same period 2019: while footfalls were still down by roughly 15%, retailers’ sales were back in the black (+0.3%) which confirms the trend seen already last year of more selective traffic, but with a greater propensity to consume, and a decided increase in the average ticket (+20.3% compared to June 2019).

Looking at the different categories of merchandise, standouts include clothing, electronics, home care, culture and leisure which in June was higher than in the same month of 2019. In terms of performance by sales area (excluding restaurants), in June all sizes, from small to large, reported growth against 2019 with an average increase of 2.4%.

The performance of the Group’s freehold hypermarkets and supermarkets was also positive in the first six months of the year, rising 1.3% against the first half of 2020.

All of this demonstrates that the urban shopping center with an attractive food anchor format is still key for the consumer and testifies to the significant capacity to react quickly once openings are allowed. 


The Italian portfolio’s occupancy, which reached 95.3%, was 100 bps higher than the 94.3% reported at 31 December 2020 which demonstrates that, despite the difficulties encountered in the period, the marketing and pre-letting activities never stopped, but rather continued effectively and with positive results: in the first six months of the year 131 leases (85 renewals and 46 turnover) were, in fact signed with a slight decrease in rents (-1.0%). Tenant negotiations relative to the 2021 restrictions are underway, while those relative to 2020 are almost completed; overall no changes to existing leases have been made as a result of the negotiations, but payments have been reformulated and temporary rebates granted.

These negotiations, along with the aid provided by the Italian government to businesses affected by the mandatory closures, allowed us to achieve good results in terms of rent collection which reached approximately 83% at 30 July, net of the rebates granted.



In Romania, thanks to the gradual elimination of the restrictions which boosted the recovery of the sectors hit the hardest by the pandemic like restaurants and entertainment, the operating performance of the Winmarkt shopping malls also showed improvement: occupancy reached 94.3% at 30 June 2021, higher than the 93.6% reported at 31 December 2020 and rent collection was also excellent at around 93%. Normal pre-letting and marketing activities continued during the half resulting in the signature of 239 leases (153 renewals and 86 turnover) with an average upside of around 0.9%.



In the first half of the year, gross rental income fell -2.1% to €73.1 million due primarily to like-for-like revenue of Italian malls which was impacted by increased vacancies at the beginning of the reporting period.  Toward this end, the increased commercial activity suggests that revenue will improve in the coming months assuming the current operating conditions and global scenario do not change.

Net rental income amounted to €55.5 million, down -1.4% against the same period of the prior year; the direct impact of Covid-19 (including rebates and credit losses, net the savings on rents payable) was €1.5 million lower than in the first half of 2020.

Core business Ebitda fell 1.6% to €50.6 million, with the margin at 66.3%.  The freehold core business Ebitda margin (relative to freehold properties) came to 66.6%.

Financial charges amounted to €16.7 million; this figure, net of the accounting impact of IFRS 16 and non-recurring expenses, was 6.4% lower than at 30 June 2020.

 Funds from Operations (FFO) amounted to €30.6 million, down with respect to 30 June 2020 (-6.8%), including the one-off provisions made for Covid-19.



In the first half of 2021 work continued on Porta a Mare in Livorno, where the development of the Officine Storiche section is underway and is expected to be completed in the second half of 2022.  Consistent with a certain renewed vitality in the sector, non-deferrable capex continued (for around €6.2 million) which includes, in addition to extraordinary maintenance, fit-outs and restyling, as well as remodeling, projects.



The market value of Gruppo IGD’s real estate portfolio reached2,267.88 million, an increase like-for-like of 0.10% compared to December 2020. More in detail:

  • malls fell slightly like-for-like by 0.1% (-€1 million), with a gross initial yield of 6.60%;
  • hypermarkets were +0.5% (+€2.8 million) higher like-for-like with a gross initial yield of 6.01%;
  • in Romania the value of the real estate portfolio reached €137.52 million at 30 June 2021, a decrease of 0.8% like-for-like, with a gross initial yield of 7.49%.

 Including the leasehold properties, the market value of Gruppo IGD’s real estate portfolio reaches €2,305.57 million.

 The Net Initial Yield, calculated using EPRA criteria, reached 5.3% for the Italian portfolio (5.3% topped up) and 5.9% for the Romanian portfolio (6.0% topped up).

 The EPRA NRV reached €1,165.2 million or €10.56 per share.  The figure is 1.7% higher with respect to 31 December 2020 due mainly to FFO and the higher cash flow hedge reserve, partially offset by a drop in the portfolio’s fair value.

The EPRA NTA came to €10.48 per share, 1.7% lower compared to 31 December 2020.

The EPRA NDV came to €10.19 per share, down 2.1% compared to 31 December 2020 due to a decrease in the fair value measurement of debt.



In terms of financial transactions, on 1 March 2021 the Company exercised the option for early redemption and redeemed the residual €70 million outstanding of the  “€300,000,000 2.500 per cent. Notes due 31 May 2021”. With the exception of this repayment, IGD continued with normal financial management actitivies.

The average cost of debt was 2.22% at 30 June 2021, lower than the 2.30% reported at year-end 2020, while the interest cover ratio or ICR came to 3.2X[1] (unchanged with respect to 31 December 2020).

The Loan to Value of 49.1% is lower than the 49.9% recorded at year-end 2020.  The net financial debt was €1,134.8 million, lower with respect to the first half of 2020 (cash generation reached roughly €20 million).



Given the positive signals seen in the last few months, in a context of general economic recovery and rising consumption, as well as the estimated impact of Covid-19 in the current year (one-off and without carry over in subsequent years), the new FY guidance for FFO 2021 calls for growth of around +7/+8% with respect to FFO 2020, a decided improvement with respect to the guidance announced in February.

This new outlook does not take into account the impact of any disposals and it is important to note that significant elements of uncertainty, including out of the Company’s control, still exist including, for example, new surges in the pandemic and the introduction of new restrictions.

[1] Excluding the effect of the last financial operation