Some Emerging Markets currencies faced pressure during January, among them the Russian Ruble. One reason are worries that the US Federal Reserve may cut its stimulus further and investors may increase the withdrawal of their money from EM.
After the completion of GoodZone, IMMOFINANZ has five large shopping centers in Moscow – a business which is very gratifying for us.
So I would like to share with you a few thoughts:
In principle, all of the rental income from the Russian IMMOFINANZ portfolio is set in euro or US dollars, thus the change in the rouble exchange rate has no direct influence on our retail asset management result.
Honestly, however, it would be unrealistic to claim that the current development has no effect on us at all because as shopping centre owners we are obviously impacted by our tenants' economic success. Fortunately, however, we have so far been in a position to handle the exchange rate situation in such a way that material economic losses could be avoided. In a few specific cases we concluded time-limited agreements with tenants that somewhat cushion the exchange rate effects, the financial effects of these are in the parts-per-thousand range, however.
We consider our tenants long-term partners and try to create and maintain win-win situations. In the past this has proven profitable in the long term and we are convinced that this approach to asset management will also allow us to continue generating above-average results.