APN Withdraws Guidance29 March 2020
APN Property Group have now provided an update to the market on its business as a result of the COVID19 virus.
APN generates most of its revenue from co-investment income and management fees.
The co-investment income is ultimately derived from rental receipts from the properties owned by the underlying funds which currently are relatively well-placed in a challenging environment, though no guidance has been given on this.
Management fees from APN's listed and unlisted trusts are based on direct property valuations that are less volatile and not subject to daily market movements, however management fees from the real estate securities funds are impacted by prices in the listed markets due to the elevated volatility.
As a result, the Board of APN Property Group Limited and the Board of APN RE Limited have deemed it appropriate to withdraw the Group’s FY2020 distribution guidance and any forward-looking statements.
Like with most other AREITs the COVD19 impacts will be significant over the balance of 2020 and into 2021 and beyond and it would be foolish to think that any of the REITs would be able to predict where earnings will finally land.
APN advised that the Group maintains a net cash balance sheet position with limited drawn debt and is taking appropriate steps at a corporate and fund level to ensure it is best positioned to weather the current market conditions.
Tough times ahead.