The company has a natural hedge against currency risk. Lease agreements are Euro-denominated similar to investment loans. Thus, the currency risk exposure is insignificant and the Euro-denominated funds from operations (FFO) should be stable. Exchange rate fluctuations have an impact on property valuation as well as on the Euro-denominated loans but do not have any real influence on the company’s cash flow.
The company is well hedged against both inflation and market interest rate fluctuations. Every year most lease agreements are adjusted by the inflation index. In addition the company has launched investment loan-related hedging strategy against interest rate fluctuations which, by using derivative instruments, will protect the company relevantly against potential increases in financial costs.
Griffin Premium RE.., due to its REIT-type operation, is focused on paying its shareholders a stable and regular dividend. The company reiterates its 2017 dividend forecast. The share price has no influence on its dividend payout ability because the dividend depends on the rental income generated from our properties.
The Company monitors all activities related to the above-mentioned draft law. It takes part in market consultations by presenting its views in public conferences and debates. All depends on the details. Griffin Premium RE.. keeps declaring that, if the new regulations are in force and its internal analyses show that such a solution would be beneficial to its shareholders, then it will likely transform itself into a REIT defined by the law. However, the Company would like to emphasize that everything depends on the final version of the law and the results of internal analyses and its advisors’ opinions.