This article is from the Australian Property Journal archive
THE board and management of Elanor Investors Group will take a 20% reduction in salary until at least the end of June, having had to close its wildlife park assets and deal with difficult accommodation and retail trade in response to the coronavirus outbreak.
Elanor (ENN), which $1.7 billion in funds under management, yesterday said it would not provide full year earnings or distributions, and that “potential financial impacts of the COVID-19 pandemic are currently extremely difficult to forecast”.
“The ongoing impact of these unprecedented events on the group will be a function of the extent and duration of the prevailing health and economic crisis.
“The group’s clear focus is on preserving and enhancing balance sheet liquidity and it is implementing a number of initiatives to reduce its cost base where appropriate. In this regard, ENN’s board and management have agreed to a 20% reduction in salary until at least 30 June 2020 to ensure an appropriate sharing of the impact of the current disruption to market conditions with our investors and staff within ENN and its managed funds.”
ENN remains within existing debt covenants, with a net gearing ratio of approximately 26.8%. The group reported a first half increase in funds under management of 46.1%, and annualised recurring funds management income rose 18.6% to $12.1 million.
In response to the government restrictions on non-essential services and social distancing requirements, Featherdale Wildlife Park and Mogo Wildlife Park – assets comprising the $52 million Elanor Wildlife Park Fund – have temporarily closed, while Cradle Mountain Lodge in the Elanor Luxury Hotel Fund has restricted operating conditions after the Tasmanian government has restricted the operations of accommodation businesses across the state, to Tasmanian workers, interstate essential workers and other prescribed visitors.
The lodge accounts for $62 million of the $159 million of funds under the management for the luxury hotel fund, which also includes the Mayfair Hotel and Adabco Hotel in Adelaide that continue to trade.
ENN’s said its commercial office managed funds are currently performing to expectations. Government, multinational and ASX 100 listed tenants. Generate 87% of income underlying real estate commercial office asset income.
However, the pandemic is creating difficult trading conditions for its retail tenants, particularly discretionary focussed retailers and service providers.
“Some tenants have closed their stores on a temporary basis, and the Fund has received requests from certain tenants for rental relief. The Fund is proactively engaging with retailers in this regard.”
ENN has just completed the establishment of its new healthcare fund which will be seeded with two south east Queensland day hospital and medical clinic properties with a combined value of $123.3 million.
Late last year, it completed the institutional bookbuild for the Elanor Commercial Property Fund, seeded with six investment properties valued at about $306 million.
