PriceSensitive

COVID-19 will have little impact on Elanor Investors Group (ASX:ENN)

Market News, Real Estate
ASX:ENN      MCAP $124.8M
25 June 2020 17:45 (AEDT)

Elanor Investors Group (ENN) has said COVID-19 will have little impact on its earnings.

The company has seen challenges from the virus in its real estate, hotels, tourism and leisure assets. The Government’s closures on borders have impacted the hotel and wildlife park sectors.

“A number of the assets in the Group’s managed funds have encountered challenging market conditions as a result of the COVID-19 pandemic,” CEO Glenn Willis said.

“The management teams have successfully managed our Funds through this difficult time, positioning the assets for strong performance as market conditions improve,” he added.

Commercial office and Healthcare Real Estate

Elanor said its commercial office managed funds are performing above expectations. The underlying real estate assets were 87 per cent over its current income from government, multinational and ASX listed tenants.

Yesterday, the Elanor Commerical Property Fund (ECF) reported its forecast funds from operations (for the end of June) was $13.4 million, which is 9.1 per cent above the PDS forecast for the same period.

Meanwhile, the company’s healthcare office real estate assets are in line with expectations, COVID-19 is expected to have minimal impact on earnings.

Retail Real Estate

Retail is starting to improve as restrictions are being eased. Elanor said its retail businesses have been performing well during the pandemic, all thanks to its supermarkets and non-discretionary specialty stores.

Elanor Retail Property Fund

The retail property fund has said its ‘defensive’ shopping centres have performed well.

Its collected rents for the months of April and May was 67 per cent and 72 per cent. The company is expecting the June collected rent will be higher than previous months.

Auburn Central’s repositioning has progressed well, with construction commencing in March and is expected to be completed in November. An update on the shopping centre is expected to be released in the coming days.

Unlisted retail managed funds

Rent collections from across Elanor’s unlisted retail managed funds have been at or above expectations.

“June’s rent collection expected to show further improvement in line with improving trading occupancy levels,” the company said.

Wildlife Park Fund

Featherdale Wildlife Park and Mogo Wildlife Park have re-opened to the public earlier this month.

Closures have impacted both wildlife parks, however, the parks have had minimal revenue impacts.

“While Featherdale’s international inbound visitation has been impacted by the closure of Australia’s borders, domestic visitation following the reopening of the Park has been in line with expectations,” the company explained.

Mogo Wildlife Park has performed particularly strongly since re-opening, reflecting the management team’s success in integrating the wildlife park into the Fund and driving significant additional revenue and cost efficiencies,” it added.

Accommodation Hotel Funds

The pandemic has hit the tourism industry around the world hard, however, Elanor has been lucky and incurred minimal financial impact.

Its NSW, ACT and SA hotels have had little occupancy levels, the court bases if the properties have been restricted, which has ensured the hotels are well-positioned to trade profitability in the short term.

The hotels are well-positioned for the increase in domestic travel.

In Tasmania, the company’s Cradle Mountain Lodge re-opened on June 12 and has had a strong number of bookings.

“Our core strategy remains focused on achieving strong returns for our investors and growing our funds management business. We are pleased with the significant funds management growth opportunities across our sectors of focus,” Glenn said.

“Furthermore, we are actively pursuing opportunities in new real estate sectors in addition to strategic opportunities to deliver our growth objectives,” he added.

On market close, Elanor is up 1.69 per cent and is selling shares for $1.20 each.

Related News