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Ascendas India Trust expects 'adverse impact' on business with India's extended lockdown

THE trustee manager of Ascendas India Trust (a-iTrust) announced on Monday that it expects “adverse impact” on its business, with the extension of India's lockdown till May 3. The country started its lockdown on March 25; it was to have ended on April 14. 

There is insufficient information available at this juncture to allow for the assessment and disclosure of the financial impact of Covid19 with certainty, said the trustee manager.

“The weak economic conditions brought about by Covid-19 could reduce demand for office space, resulting in lower occupancies, softening of rents and potentially higher bad-debt provisions,” it said in a statement. “A drop in interest income from forward purchases may be possible.”

The impact on its retail tenants at Park Square Mall in Bangalore will be high due to the closure of the mall since March 14, said the trustee manager. Retail comprised 1.4 per cent of net property income in FY2019.

With India’s country-wide lockdown, all a-iTrust’s staff and tenants are working from home except for those performing operation-critical roles. Its parks remain open for essential services to support a few tenants’ critical IT and ITES operations.

In the update, the trustee manager said that preparations for re-opening are underway and it plans to take necessary precautions to ensure the safety of its parks and tenants.

“These measures can extend beyond the end of the lockdown period and will lead to higher operating expenses,” it added.

The trustee-manager announced on Feb 26 that a-iTrust will adopt the announcement of half-yearly financial statements with effect from the financial year ending Dec 31, 2020. For FY2020, the next financial results announcement will be for the half-year period ending June 30, 2020.

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