Commentary by Milan Kratina, CEO Accolade present situation of a society-wide need
In the present situation of a society-wide need, many of you are probably asking what will happen when all this is over. Economists are rightfully more or less skeptical. How will this influence our fund?
Together as the Accolade Fund, we hold a diversified portfolio comprising 767,419 sq m, with an annual rent of EUR 37.640 mil. Thus far, we have not noted any deviations in rent payments, 100% of rent has been paid in the first quarter.
We are in contact with our tenants, discussing the present situation as well as future developments, and together, we do everything possible to manage the situation. In terms of the impact on the Fund’s performance, it is good to note that the rent is still secured by bank or parent company guarantees, which is, in the short-term, another security feature assuring that the impact of this very non-standard situation is as little as possible.
Industrial warehouses play an important role in supplying all of us and the present situation only goes to show the importance of quality infrastructure around large cities for the smooth functioning of those cities. Fast and efficient transport, modern warehousing, and above-standard supply solutions. Those are, among others, the things that assure sufficient food and everyday goods. Yes, that is what our warehouses and parks allow.
These are demanding times for all of us. It is, however, necessary to understand that it is manageable and that it differs fundamentally from the situation that we experienced more than ten years ago. The entire banking system is in dramatically better shape and it continues to finance real estate projects.
What all of us can see is maximum effort of governments to ensure liquidity for the real economic sector, i.e., companies. Germany announced last week that it will provide, through the government development bank KfW, unlimited liquidity to companies affected by the pandemic, to help them cope successfully with this period.
Albert Einstein’s statement that “In the middle of difficulty lies opportunity” is notoriously known. The present situation is an opportunity for our entire society to realise how essential and valuable are certain components of the state in which we take no interest in peaceful times.
At the same time, many people will also realise that many of the things they have been accustomed to can be done differently, without them physically visiting a shop. The digital economy and Internet sales of goods will increase in importance even more. But nothing changes in the fact that behind the success of e-commerce, there have always been quality logistics and warehousing.
We believe that in the medium and long-term, the situation will strengthen the European logistical and production industry. We have already noted discussions about returning production back to Europe and reducing dependence on production in Asia.
Ultimately, it may be our locales and the most modern industrial warehouses built on them, and the progressive and flexible tenants in them, that will not only help the current situation but will constitute, in the future, a foundation for further geographic diversification of production premises, not only in the pharmaceutical sector but also in other sectors.
We, as your Fund, are operating without restrictions, with most of our employees working remotely. But should you have any questions, please do not hesitate to approach me or my colleagues. Thanks to everyone and I firmly trust that, as a society, we will come of out this crisis stronger yet.