With the world in lockdown the Atterbury Europe team now has to navigate a business that spans three countries and three jurisdictions, from the Netherlands-based head office. Atterbury Europe CEO Henk Deist gives insight into the implications and strategy during this time of extraordinary circumstances.
No business could have prepared for the COVID-19 pandemic. How has it affected the space in which Atterbury Europe plays?
The property market in Europe has been impacted severely by the pandemic, and especially mall owners have been hard hit. All our malls across all three jurisdictions have been closed down by government decree and only supermarkets and pharmacies are trading, while some restaurants do deliveries and offer takeaway services.
In the meantime, the Serbian malls have been open again since the 8 May and in Cyprus an opening date of 9 June 2020 has been announced, leaving only Romania to formally announce an opening date. Also we are aiming to open the new BEO Mall in Belgrade on the 18 June with most tenants keen to start trading again. Traffic and trading will not return to normal quickly, but it is good to have opening dates again.
What are the immediate implications for Atterbury Europe and what are the contingency plans in response to the pandemic?
We can only respond in three ways: (1) negotiate with tenants to pay some rent or costs during the closed period; (2) reduce operating costs to a minimum including making use of government assistance programmes to the extent they are available, and (3) postpone bank debt repayments – and we have done all three and we are fortunate in that in two out of the three countries we have statutory moratoriums in place announced by government and in the third country, banks were willing to postpone – this ensures that we will have sufficient liquidity to survive the period.
Frequent travel is a hallmark of the Atterbury Europe team’s work – how have you adapted to the lockdowns and travel restrictions?
Yes, especially our asset management and development management functions require frequent travelling. We have no choice but to stay at home and manage everything via electronic communication – our airpod batteries go flat frequently as we have many and long calls daily!
Are there different measures in place in the different countries that you operate in, and how does than impact?
Working across three jurisdictions does bring its own complications. The laws are different regarding the applicability of force majeure and the lease contracts are different and so is the government response. Fortunately, we have competent local partners in Serbia and Romania who can deal with issues on the ground.
The global economic outlook is rather gloomy and there is still so much uncertainty about the full impact of the pandemic. How is Atterbury Europe approaching this landscape, looking forward to the rest of 2020?
There is not too much purpose in speculating about the future. As things stand, we think 2020 will be a bad year, but do not believe long-term property valuations will decline – one year in the cycle of quality assets with a long lifespan should not bring about a permanent diminution in value.
What is your take on the impact that COVID-19 will have on the way we do business in future? Or do you expect that the world will go back to the way things have always been done, once the crisis is over?
People are spending very little at the moment. If we can minimise job losses, I believe a lot of spending power will go back into the economy and the recovery can be swift. People tend to have short memories when it comes to a crisis and tend to move on to where it was prior to the crisis. But perhaps we have learnt how interconnected we are – we are all interdependent and need each other for our economic welfare – and this is across the globe, stretching over many different countries and nationalities. And also, we need each other for our social and spiritual wellbeing – spending time with the family is very good during this time, but we are social beings and need a variety of human relationships and interactions to thrive.