The impact of the outbreak and spreading of COVID-19 and the measures taken by the government became visible as of the second quarter of 2020. The health of our employees, tenants and their staff and customers is our foremost priority. Second is the continuity of our company through the relations and arrangements with our tenants.

Belgium, France and Spain went into a mandatory lockdown for a number of months, during which all food & beverage establishments and non-essential shops were obliged to close; in the Netherlands the lockdown was somewhat less strict. Even so, some international retailers in the Netherlands shut down their shops on their own initiative. The COVID-19 pandemic and the government measures had negative implications for our tenants and this in turn affected Vastned’s results. The Vastned team has worked very hard indeed to find solutions. A crucial element in this was to find workable tailored solutions with our tenants, many of whom have suffered badly. Due to a proactive approach and intensive contacts with our tenants we have been able to come to arrangements for virtually the entire portfolio that are in line with the arrangements in the industry. This will negatively impact the result in the short term because with these arrangements Vastned came to the aid of tenants who were struggling in the face of the crisis. In the first half of 2020, Vastned granted € 2.3 million in rent waivers, and deferred rent payments totalling € 0.9 million. The objective has always been to find a solution together with our tenants, so that the outcome in the long term is positive for both parties. The arrangements give Vastned, especially in these uncertain times, more grip on the continuity of the rental income and on maintaining the high occupancy rate. 

And not only has our organisation proved to be highly robust in this crisis, the same goes for our high-quality property portfolio. It is showing the robustness of its value, with only a limited value decrease in these economic crisis conditions of 2.5% in the first half year of 2020. The high occupancy rate of 97.4% also demonstrates that Vastned has the right mix of quality assets that are still highly in demand. Of course, we are working hard to control our costs, which has resulted in a significant decrease of general expenses of € 0.7 million compared to HY1 2019. Vastned's liquidity position remains excellent, with a well-balanced credit portfolio, unused credit facilities of € 94.5 million and a loan-to-value ratio of 42.6% as at 30 June 2020.

During the publication of the Q1 2020 trading update Vastned withdrew its forecast for the 2020 direct result because at that time we were already facing the COVID-19 crisis. Now the lockdowns in the countries in which Vastned is active have been lifted, all tenants are back in business and good arrangements have been made with tenants, we can afford to look ahead once more. For our 2020 outlook, we are assuming there will not be any more national lockdowns, and the focus will remain on maintaining the high occupancy rate and also on further cost control. In this context the Executive Board has decided to waive any bonuses for 2020 and maintains its decision to reduce its fixed salaries by 15% for the remainder of 2020. The same goes for the remuneration of the Supervisory Board. The number of bankruptcies in the portfolio is small, but in our 2020 outlook we do take into account that a rising number of tenants will go bankrupt. Based on this Vastned forecasts a direct result of between € 1.70 and € 1.85 per share. The quality of the portfolio in conjunction with the arrangements made with tenants will enable Vastned to weather the storm.