Flexibility and adaptation, key to prudent optimism
- Pei’s portfolio reached COP 6.9 trillion, with more than one million square meters of leasable area and 146 assets.
- During the period, more than 106 thousand m2 were retained, putting the retention indicator at 90%.
- Physical vacancy at year-end stood at 8.8% and economic vacancy at 8.6%.
- Receivables turnover closed the year at 10 days, reflecting a positive trend.
- On February 12, the Distributable Cash Flow payment for the fourth quarter of 2020 will be made, at a value of COP 133,119 per security.
- The credit-content securities program was updated in 2020 to expand its issuance scope to green bonds and commercial paper.
Bogotá, February 2021 Pei Asset Management, Pei’s real estate manager, held the first 2021 teleconference for Pei Investors, presenting the most relevant developments and indicators from an atypical year like 2020.
The COVID-19 health emergency brought about a shift in the dynamics of various economic sectors. The vehicle faced challenges that led to the development of flexible alternatives to continue generating value for tenants and investors.
This allowed 2020 to close with positive indicators: a portfolio of COP 6.9 trillion in assets under management, represented by more than one million square meters of leasable area and 146 assets, as well as 1,900 lease contracts and the trust of 4,557 investors.
In order to prioritize the long term and reaffirm Pei Asset Management as a real estate partner to tenants, relief was granted during the year totaling COP 40,219 million in discounts and COP 22,554 million in deferrals.
Portfolio occupancy performed well at year-end, with positive retention levels and vacancy kept under control in single digits. Throughout the period, more than 106 thousand m2 were retained, putting retention at 90%, and an additional 32,230 m2 of available space was leased. Regarding portfolio vacancy, physical vacancy was 8.8% and economic vacancy was 8.6%.
In the second half of the year, the economy experienced different dynamics that allowed for expanded operations at the properties and a positive impact on foot-traffic trends across each category. Logistics and industrial assets were the first to benefit as the segment’s operating levels normalized, with traffic stabilizing at 86%. Commercial assets, meanwhile, reached 70% starting in November, with purchase levels close to those recorded during the 2019 year-end season.
It is also worth noting that, to date, Pei Asset Management has supported and facilitated the achievement of the Biosafety Operations Seal, awarded by the Colombian Institute for Technical Standards and Certification (Icontec), for 19 of Pei’s portfolio assets, through the investments necessary to ensure compliance with all the protocols set out in Resolution 666 of April 2020.
In seeking ways to optimize financial management, a debt restructuring was carried out during the year that allowed short-term maturities to be extended. The period closed with a debt-to-assets ratio of 29% and a cost of debt of 4.72%.
Detailed receivables management throughout the year allowed net receivables turnover to close the year at 10 days, reflecting a substantial improvement in this indicator compared to the levels recorded in the second quarter of the year.
Regarding equity-security liquidity indicators, the average daily trading volume of TEIS securities was COP 1,949 million, and 5-year and 12-month returns stood at 10.3% and 5.8%, respectively. Meanwhile, the 2020 dividend yield was 4.77%.
2021 WORK AGENDA
During the teleconference, the following key activities for the year were highlighted:
- Distributable Cash Flow Payment: On Friday, February 12, the Distributable Cash Flow payment for the fourth quarter of 2020 was made. The returns delivered amounted to COP 133,119 per security, equivalent to a total absolute value of COP 57,430 MM. This represents a 4.5-fold increase compared to the Distributable Cash Flow accrued during the third quarter of 2020.
- Capital Markets Activity: The vehicle continues preparing for its migration to the equities trading market according to the timeline set by the BVC, which currently has a deadline of April 12, 2021.
- Securities Market Issuance: Together with placement agents, market conditions will be evaluated to capture opportunities for a potential issuance of equity securities or debt securities. Nonetheless, the vehicle has sufficient debt capacity to meet its ongoing asset acquisition commitments.
- Annual General Meeting of Investors: preparations for this event, to be held virtually, are underway, and it is expected to take place in March.