The Arcona Property Fund reports that the fight to contain COVID-19 is disrupting the economic situation across the region. “The damage will probably be connected with a loss of faith and a concurrent negative development of prices and liquidity on the global financial markets, which creates the generally challenging operating environment for investment funds,” wrote the fund in a statement intended to inform shareholders of the challenges that could arise going forward.
However, Arcona’s management pointed out that sectors such as the travel industry, food and beverage and sports activities play only a minor role in its overall income generation. Office rents provide roughly 57 percent of the fund’s total income stream, with its biggest office tenant AT&T generating around 8.5 percent of the total. Kros and Intive are the second and third biggest earners in Arcona’s portfolio.
Arcona will publish audited results for the fund for 2019, in early April but many of the key provisional figures for the year are already available. They include €11.06m in gross rental income, a rise of 2.4 percent over 2018 and an 8.3 percent increase in net rental income to €5.2m. The portfolio’s occupancy rate for the year slipped from 86.9 percent to 84.3 percent. Its current loan-to-value ratio stands at 50 percent. Arcona described the evolving market situation “highly volatile.”
