4 November 2021 12:05

Results at 30 September 2021: the path of recovery leading to pre-covid levels continues

  • Good performances in June- September, the first four-month period without restrictions and fully comparable with 2019: tenant sales -0.2% and roughly 85% of the footfalls recovered; average ticket up +21.7% in September vs. Sept.2019
  • Rent collection 9M2021: in Italy c. 86%[1]; in Romania c. 96%
  • Financial occupancy higher vs FY2020: Italy 95.40%, +114bps; Romania 94.93%, +133bps
  • Financial structure strengthened: Loan-to-Value pro forma at 30 September, including the impact of disposals, comes to 45.6%, 270 p.p. lower than the Loan-to-Value at 30/09 of 48.3%
  • FY guidance for FFO confirmed at +7/8%


Bologna, 4 November 2021. Today the Board of Directors of IGD – Immobiliare Grande Distribuzione SIIQ S.p.A. (“IGD” or the “Company”) examined and approved the interim financial report as at 30 September 2021 during a meeting chaired by Rossella Saoncella.


Message from the Chief Executive Officer, Claudio Albertini  

“The operating results recorded in the last four months allow us to look to the future with more confidence: tenants’ sales are back in line with 2019, which is very significant as 2019 was one of IGD’s best years in terms of operating results.  Progress is also being made in rent collection.  The few tenant insolvencies suggest that, while the problems caused by the pandemic have not been completely overcome, our business model is totally solid” Claudio Albertini, IGD’s Chief Executive Officer stated “The disposal announced recently will also allow us to lower the Loan-to-Value noticeably and have the financial resources needed to cover future needs for all of 2022.  All of this, assuming there are no new restrictions as a result of a worsening public health situation, creates the conditions needed to resume paying a dividend to our shareholders in 2022.”




After a first phase in which IGD’s results were still impacted by the restrictions imposed by the Italian government in response to the Covid-19 health crisis, gradual progress was seen in the year once the restrictions were eased.  As of 17 May, when the shopping centers became fully operational, the results pointed to a trend of continuous improvement: in the period June-September, the first four months not subject to any restrictions, footfalls and sales rose +1% and +9%, respectively, compared to the same months of 2020. The comparison with the same period of 2019, which was not affected by the pandemic and one of the best in IGD’s history, is even more significant: while footfalls were still down by around 15%, retailers’ sales were basically in line (-0.2%) with a decided increase in the average ticket (+21.7% September 2021 vs September 2019) which testifies to our shoppers increased propensity to buy.

Looking at the performance of the different categories of merchandise in the period June – September 2021, clothing, home care, electronics, culture and leisure, which account for more than 81% of our lease portfolio, were higher than in 2019. Restaurants and services continue to experience difficulties, linked also to the problems encountered when organizing in-person events and other factors unique to this period. Cinemas (4 in our portfolio), in fact, have just resumed a pre-Covid level of operation (with even more movies coming out).

In the first nine months of 2021 the performance of the Group’s freehold hypermarkets and supermarkets was in line with 2020 (+0.05%).

All of this demonstrates that the urban shopping center format, with a strong food anchor, is still key for the consumer and testifies to the significant capacity to react quickly once businesses are allowed to open.  

 The Italian portfolio’s occupancy, which reached 95.4%, was 114 bps higher than at 31 December 2020 thanks to intense leasing activity and the liveliness of the retail sector: since the beginning of the year there have been 43 new openings in IGD’s shopping malls, testimony to how retailers continue to believe in this business model and in-person shopping. In the first nine months of the year 191 leases (124 renewals and 67 turnover) were signed with a limited downside of around -1.2%.

 Rent collection continues to show improvement, reaching approximately 86% at 28 October, net of the rebates granted[2].



In Romania, thanks to the gradual elimination of the restrictions, the operating performance of the Winmarkt shopping malls was good in the first nine months of 2021: occupancy reached 94.93% at 30 September 2021, 133 bps higher than at 31 December 2020. Rent collection was excellent at around 96%. Leasing activity also continued in Romania and resulted in the signing of 303 leases (205 renewals and 98 turnover) with a slight upside of around 0.4%.

The country is currently experiencing a new wave of the pandemic, including as a result of the pace of the vaccine rollout which was lower than the European average (only approximately 30% of the population has been vaccinated to date); for these reasons the government has introduced new restrictive measures, like the need to have a green pass in order to enter malls, which have affected the Group’s shopping malls.  The Group will continue to monitor the situation going forward and will do everything possible to keep the structures operational and ready for the scenario that is materializing.



In the first nine months of the year, gross rental income came to €109.1 million  taking into account the rebates granted for Covid.  The result is explained by:

  • for around -€2.2 million, lower revenue like-for-like in Italy. The decrease is attributable entirely to Italian malls due, above all, to remarketing the impact of which will be spread out over the next few quarters; hypermarkets rose slightly (+€0.1 million);
  • for around -€0.7 million, lower revenue not like-for-like and remodeling;
  • for around -€0.1 million, lower revenue like-for-like in Romania.

Net rental income amounted to €86.9 million, down -3.1% against the same period of the prior year due to the deferred impact of marketing, described above, and an increase in a few operating costs like condominium fees.  The direct impact of Covid-19 (including rebates and credit losses, net the savings on rents payable) was roughly €1.2 million lower than in the first nine months of 2020.

Core business Ebitda fell 3.9% to €79.6 million, with the margin at 69.8%.  The freehold core business Ebitda margin (relative to freehold properties) reached 70.4%.

Financial charges amounted to €24.8 million which, net of the accounting impact of IFRS 16 and non-recurring expenses, was 8.7% lower than at 30 September 2020.

Funds from Operations (FFO) amounted to €48.4 million, including the net one-off impact of Covid-19, which is 9.3% lower than at 30 September 2020. The FY 2021 guidance for FFO, which calls for an increase of around +7/8% against 2020, is, however, confirmed as to date the additional direct costs related to Covid-19 of approximately €10.4 million incurred in the last quarter of 2020 are not envisioned.



On 30 September 2021 Fitch Ratings confirmed the Investment Grade rating of BBB- and changed the outlook from Negative to Stable. The improved outlook reflects the greater visibility for rental income, supported by the gradual increase in footfalls and the sales of the tenants in IGD’s shopping centers which Fitch Ratings believes will be back to pre-pandemic levels before year-end 2022.

The average cost of debt was 2.20% at 30 September 2021, lower than the 2.30% reported at year-end 2020, while the interest cover ratio or ICR came to 3.4X (versus 3.2x at year-end 2020).

The net financial debt came to €1,116.05 million(€1,077.04 million adj. ex IFRS16), while the gearing ratio was 0.96x.  The Loan- to-Value was lower than the 49.9% recorded at year-end fine 2020, coming in at 48.3%.



On 21 October 2021 IGD signed an agreement with ICG’s Sale & Leaseback Fund for the sale of a portfolio of hypermarkets and supermarkets for €140 million, in line with the book value at 30 June[3].  The portfolio comprises 6 “stand alone” properties (5 hypermarkets and 1 supermarket), not connected to IGD’s freehold malls, which generate net rental income of approximately €7.7 million per year.

The properties will be transferred to a closed end real estate investment fund (an Italian REIF) formed by ICG and IGD, and managed by Savills Investment Management SGR S.p.A., of which ICG will hold 60% of the quotas (Class A, with a preferential yield) and IGD the remaining 40% (Class B, with a subordinated yield)[4]; IGD will be in charge of the portfolio’s property management.

At the time of the closing, which is expected to take place at the end of November, IGD will receive roughly €115 million net[5] which, together with the available liquidity (which amounted to around €54mn at 30 September), will provide the Group with the resources needed to cover almost all maturities through 2022. The transaction is subject to receiving a loan for at least 50% of the assets’ value.

The purpose of the sale is also to reduce the Group’s financial leverage: taking into account the impact of the sale, the pro-forma Loan-to-Value comes to 45.6% and is expected to be even lower at year-end.



Given the good performances seen in the last reporting period, as well as the expectation that the impact of Covid will be lower this year than in 2020, the FY 2021 guidance for FFO, which calls for an increase of around +7/8% against 2020, is confirmed.

Furthermore, in light of the good operating results, as well as the prospects for the next few months, and assuming there are no new restrictions as a result of a worsening public health situation, the Company believes that the conditions needed to resume paying a dividend to its shareholders in 2022 exist.


[1] % of turnover net of rebates and credit losses
[2] % of turnover net of rebates and credit losses
[3] Based on this amount reserves of roughly €32 million would be released, of which 50% would be used to determine the mandatory dividend to be distributed within the next two years.
[4] The transaction’s yields will also depend on the terms and conditions of the loan, as well as the market conditions at the time of exit from the vehicle.
[5] Assuming a loan for 55% of the asset value is obtained.