Neil Downey's questions to Brookfield Property Partners (BPYPP) leadership • Q1 2020
Question
Neil Downey of RBC Capital Markets requested details on valuation sensitivities for the Core Retail business, the current borrowing climate for malls, the character of upcoming debt maturities, the potential for an NOI deficit in the hospitality portfolio, and the net effect of foreign currency movements on equity. He also asked about the investment structure of the retail revitalization program and liquidity within the BPYU entity.
Answer
CFO Bryan Davis provided sensitivity metrics, noting a 25 bps move in discount rates impacts value by about 2.5%. He stated they have requested 12-month extensions on 2020 retail debt and are confident in refinancing due to low LTVs. He acknowledged the hospitality portfolio could see negative FFO in Q2 but noted some positive signs of recovery. Davis also quantified the negative FX impact on equity at approximately $500 million. CEO Brian Kingston added that the retail revitalization program would be flexible, offering various forms of capital, and clarified that BPYU has no liquidity limitations separate from the parent company.