Frasers Property temporarily shuts Germany and UK assets, shortens staff hours

FRASERS Property has temporarily shut its three hotels in Germany, and will also progressively close its 11 hospitality properties in the UK.

In Australia, the real estate giant has closed all food and beverage outlets at two hotels - one in Sydney and the other in Melbourne - in the interim.

Meanwhile, its malls in Singapore remain open only for essential services, and restaurants are limited to only takeaways or deliveries.

In a statement addressing customers, partners and shareholders, Frasers Property group chief executive officer (CEO) Panote Sirivadhanabhakdi said that these measures were put in place in response to orders by governments to enforce strict safe-distancing rules and the shutdown of activities amid the novel coronavirus pandemic.

As for its employees, the group has implemented a series of cost-containment measures, such as shortened work hours and unpaid leave.

To support its staff's mental well-being during the outbreak, Frasers Property will roll out an employee assistance programme across the group. "We do understand that safe distancing can somewhat feel isolating," Mr Sirivadhanabhakdi said on Wednesday.

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The group's cost-containment measures also include temporarily closing rooms and amenities by floors at its properties, and reviewing all operating contracts.

"Across the cities we operate in, we do see an impact on our overall hospitality business," Mr Sirivadhanabhakdi said. The company is working closely with the hotel and serviced residence operators to mitigate the negative impact, while "taking all possible steps to preserve staff employment", he added.

In China, there are "very early signs" of improvement as the workforce progressively gets back to work and Wuhan - the initial epicentre of the Covid-19 pandemic - cautiously reopens after a two-month lockdown, the group CEO noted.

For tenants in the group's markets, Frasers Property is rolling out relief measures especially to those experiencing an immediate impact from the pandemic, such as from government-enforced closures. Such measures vary across the markets that the group operates in as it partners local authorities.

"I want to highlight that these are complex issues within each market," Mr Sirivadhanabhakdi said. "To the best of our ability, our aim is to help tenants cope with their immediate cash flow, boost sales and extend as much flexibility as we can to accommodate their needs."

In markets where local authorities have provided property tax rebates to businesses, the group is fully passing on these rebates to tenants and is also providing additional rental support.

It had announced on March 27 that it is also setting aside S$45 million for further rental rebates for tenants across all its malls in Singapore, on top of an earlier tenant-support package unveiled in late-February.

Although Frasers Property is prepared to do more and strongly supports the government initiatives to protect jobs and livelihoods, the company is "also delicately managing the financial implications", the CEO said.

He added that the group has been disciplined, both in restocking its land bank and in capital management.

"Along with industry peers, we are facing an uncertain environment that impacts our business performance and inevitably, revenue and earnings."

Mr Sirivadhanabhakdi concluded his message by reassuring the group's shareholders, customers and partners. "While we are certainly dealing with extraordinary circumstances, it is important to internalise that we will all get through this," he said.

Shares of Frasers Property fell S$0.01 or 0.9 per cent to trade at S$1.12 as at 2.10pm on Wednesday.

Frasers Property Singapore manages Frasers Centrepoint Trust and Frasers Commercial Trust, overseeing a portfolio of 14 malls as well as 12 office, business space and business park properties.

Globally, the group's hospitality business owns and/or operates serviced apartments and hotels in over 70 cities across Asia, Australia, Europe, the Middle East and Africa. These include the 11 assets in the UK, four in Australia and three in Germany.