Pandox’s first results since the death of Anders Nissen saw the group coming out strong, with acting CEO Liia Nõu commenting: “I feel – despite the difficult situation – optimism for the future”.

Nõu described “considerable pent-up demand for travel” which was converting into occupancy when covid restrictions were cut, commenting that, with 80% of the portfolio regional and domestic, Pandox had high exposure to that critical local demand.

It was the issue of rents which most gripped the assembled, with all but one analyst eager to quiz Nõu about how much they’d got in, cut, or bailed on – the outlying question was curious about refinancing. There’s always one. 

We have heard much during the pandemic about the tenants’ position, but very little from the owners, somewhat understandably. Commenting on government support, Pandox pointed out that in certain countries there were programmes covering a specific percentage of companies’ fixed costs, but that “there is in general no rent support for property owners”. Since the beginning of the pandemic, tenants in Germany and the UK have been able to postpone rent payments and to capitalise and pay their rents subsequently over an extended period – that period is now over in Germany. 

Nõu said that there had been no rebates on minimum rents, but payment plans instead. This had gone well; rent payments were received in the second quarter in line with original and new, temporary payment terms. 

As of 30 June, accounts receivable relating to deferred rent under the new temporary payment terms amounted to the equivalent of MSEK 640, compared with MSEK 566 as of 31 March. Contractual guaranteed minimum rent combined with fixed rent amounts to the equivalent of almost MSEK 2,000 on an annualised basis and this was also expected to make up most of Pandox’s revenue in the third quarter of 2021.

Nõu said that the issue of changes to payment was peaking now and that repayments would be starting at the end of the third quarter. Due to the structure of leases, variable revenue under leases with minimum rents were only expected to materialise to a limited extent in 2021. A gradual increase in occupancy during the quarter provided an increased contribution from pure, revenue-based rent in the Nordics and revenue from Operator Activities.

Pandox’s financial position remained strong with a loan-to-value ratio of 49.7% and cash and cash equivalents and unutilised credit facilities of MSEK 4,377 as of 30 June 2021. Certainly something for most tenants to envy.

As lucky luck would have it, Scandic, one of those tenants, reported on the same day as Pandox. Scandic had been viewed by many at the start of the pandemic as most likely to fail, be ripped apart and consumed whole, but the group was quick to talk to its landlords about its rent issues and meant that only fixed and guaranteed rent was paid. Rental costs were reduced by approximately 250 MSEK due to state aid during the Q2 in question.

State aid you say? Best whisper it or they’ll all want one. 

All this added up to Scandic CEO Jens Mathiesen making a lot of positive comments about cashflow and profitability as the company looked to ride the growth in travel across the Nordic countries. The group was even taking corporate bookings for the Autumn and at the end of the quarter Scandic’s available liquidity totalled more than 2,100 MSEK.

Speculation about Pandox’s future is for another time, although such a huge and glistening property portfolio is no doubt keeping many a plotter awake at night. What we have seen about how it works with its tenants is that it believes that the relationship between landlord and tenant is not zero sum. It’s a cliché to say that the Nordic people are more community and coalition-minded than some others, but you know what they say about clichés….

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