Dear investors, shareholders and partners of Investix Germany,
We hope that in these tough and unprecedented times of the Covid–19 pandemic affecting the world, that you and your family are safe. As we are closely analysing the many ways this situation is affecting every aspect of our daily lives, we would like to update you as to how we at Investix are managing the situation and the actions we are taking to minimise the risks of your investments with us.
Ongoing business at Investix offices
Over recent years Investix has implemented comprehensive digital systems allowing us to monitor properties, financial data, and tenant activities online with the result that our business is now location independent. This has given us the flexibility to organize fully remote working environment for all of our employees since the 17th of March. Depending on further government recommendations and the developing situation with Covid-19 in Germany over the next few weeks, this remote work is scheduled to continue until the 19th of April. While the wellbeing of our employees is a top priority for us we are striving to maintain our high level of activities and ensure that properties, tenants and our clients are served well.
German Government response to Covid-19
Health authorities, governments and financial institutions globally are uniting in their goal of protecting and treating their populations, containing the spread of the virus, and ensuring the stability and health of businesses. Last week the German parliament approved an historic aid package of €750 billion to support the German economy and shield the country from economic risks due to the Coronavirus shutdown. Currently the main focus is to use these funds to mitigate the damage and protect jobs, businesses and the health sector and to make sure the help will be delivered promptly and efficiently.
Are my investments into properties in Germany safe?
Residential real estate is once again proving to be the most resilient investment during the crisis. While a big majority of investments are suffering major losses, residential real estate seems to be the least affected. Of course, in exceptional circumstances like the current Coronavirus, it is difficult to view the longer-term repercussions. However, as long as the German government is providing support to businesses which continue to provide financial support to their employees and government aid packages for unemployed are delivered, the rental income will continue to flow, which is the main priority for the Investix business model.
Investment risk assessment and mitigation
In order to support the population during the crisis, the German government has implemented extra measures to protect citizens’ homes and the overall rental situation. New policy to restrict and delay tenant evictions in the cases of unpaid rents, has been implemented, effective from 1st of April until the 30th of June 2020. In case the tenant is unable to pay their monthly rent due to job loss during this period, the due rent payment can be delayed and landlords cannot act with a normal tenant eviction process. However, the unpaid rent is not simply written off and will be accrued as a debt against the tenant. Our property management team is making sure the tenants are fully informed and receive the necessary assistance should this situation arise. Each situation will be assessed individually and all the unpaid payments will be registered in our tracking system.
Due to fast and generous government funding, we do not expect a huge drop in collecting rental income from existing tenants. However, the current shutdown restricts the renting of vacant apartments to new tenants, which we see as one potential issue affecting the flow of rental income. Vacant apartments could result in the loss of planned rental income and an increase in the level of running costs. Depending on how long the current shutdown lasts, we expect some of the investments may have a reduced rental cashflow due to an extended period of vacancies.
What comes next?
While we are hoping the situation will be resolved within the next couple of months, we are commited to continuing to operate and navigate the situation with a strong focus on bringing the best possible outcome for our investors. Investix will continue to update you with all necessary developments in Germany over the coming weeks.
We are confident that at Investix we can survive this crisis and minimise all risks in advance so we can come out of this crisis strong and prepared for growth.
Stay safe and stay healthy,
Marco Knoblauch & David Healy
Managing partners
