Good morning, everyone, welcome to Citycon's Q1 2020 result audio cast. We have today published our Q1 2020 interim report. This can be found from our webpage under Investors section. My name is Laura Jauhiainen. I'm the new head of investor relations at Citycon. I'm here with our CEO, Mr. Scott Ball, and our CFO and Executive Vice President, Eero Sihvonen. Scott will start today's audio cast with a brief overview of the quarter. He will also discuss the recent events around the COVID-19 outbreak and the implications on Citycon. This will be then followed by Eero's financial overview. Scott will conclude today's presentation with a few remarks of our priorities going forward. As usual, you will have a chance to ask questions after the presentation. There will be a separate Q&A session once the gentlemen have finished. Scott, please go ahead.
Thank you. Good morning, everyone. First, I'd like to welcome Laura to her first Citycon quarterly call. She's our new and improved Mikko, if you will. I'm pleased to present our Q1 results, which show that despite the recent events, our results are still solid for the quarter. As Laura mentioned, I'll go through a short summary of Q1 and the key highlights of the quarter. I'll discuss the situation with COVID-19 and its impact on our business, and this will be followed by a more comprehensive financial overview by Eero. I will conclude today's audio cast with a few remarks on the operational actions taken as well. To put it mildly, March was a month of unexpected events, and I'm pleased with our results for the quarter. I'm sorry, there's some background noise there. At comparable rates, our net rental income increased by 0.3% and amounted to EUR 52.4 million.
Like-for-like NRI increased by 0.7%. Weak currencies and property valuations, however, burdened the result. Our occupancy rate remained at a good level of 94.5%. Tenant sales and footfall slightly declined, but were still close to previous year level. During the quarter, we completed the acquisition of Sector Portfolio 2 AS, a portfolio of three shopping centers in Norway. In connection with the transaction, we successfully divested one of the three assets marketed at a price higher than the acquisition cost. While Q1 was operationally a solid quarter, the impact of COVID-19 started to show in the latter half of March, when government restrictions were gradually implemented in our operating countries. Management's focus has been on securing the continuance of our operations and availability of the critical services such as groceries, pharmacies, and social services we provide at our premises.
Our infrastructure has allowed us to work and run the operations efficiently from remote locations, and safety of our customers, tenants, employees remains our top priority. Additionally, our conservative financing strategy and strong liquidity give financial strength and flexibility. At the end of Q1, our cash stood at EUR 124 million, and we had EUR 350 million of unused credit facility, and our LTV stood at 45.7%. During these unusual times, our strategy brings stability, and let me just take a minute to remind you of our strategy. As you've heard us talk about in the past, 85% of our locations are located in the top two cities in each of the countries we operate in. We're in the capital cities and the second largest cities. We focus on urban hubs, and we merchandise our shopping centers towards necessity-based goods. Those goods include groceries, liquor, pharmaceutical, municipal services, healthcare.
Over 30% of our net rental income comes from necessity-based tenants. This balances fluctuation of retail demand. Public sector tenants that provide critical services to our citizens are a growing part of our business, as we've discussed previously. As mentioned, our conservative financing strategy gives strength and flexibility. Our financing is mainly based on unsecured debt with long maturities. Our high proportion of unencumbered assets gives us flexibility to consider secured loans options. Additionally, the ECB has announced a EUR 750 billion bond purchase program. Citycon is eligible for these bond purchases, which Eero will discuss a bit later. We see that our long-term strategy to focus on urban and community hubs remains highly relevant. Having retail, public, and private services, as well as entertainment under one accessible location provides a unique competitive advantage for us.
Having centers located in transportation hubs supports the natural customer flow and accessibility of our services. We believe that this long-term strategy supports our position in the future when our tenants are implementing their omni-channel strategies. Because of near-term uncertainty, we have withdrawn our guidance for 2020. Taking a global perspective, Nordic countries are well positioned to come through the COVID-19 crisis. In the Nordics, governments are proactively engaged with preserving the economic viability of business. The economic support both provides support for our tenants' ability to pay rent as well as consumer purchasing power. In general, mobility restrictions are looser compared to Western Europe. We have been able to keep our shopping centers open with certain adjustments to operating hours. In Sweden, the government has announced a significant relief program that consists of both direct business subsidies and company loans.
Additionally, a rent relief program that would partially cover the cost of rental reliefs has been announced. In Norway, the government has announced a significant relief program that would cover up to 90% of tenant's fixed costs under certain conditions. Implementation of this package has already started. In Finland, more forms of support have recently been announced by the government, and while they may be less than Norway and Sweden, they've indicated that further discussions are underway. We are reviewing any requests for rent relief on a case-by-case basis, keeping in mind the government assistance as I've just announced. Switching back to our portfolio operating metrics, as mentioned, like-for-like net rental income increased when measured at comparable rates. Weak exchange rates negatively affected the total net rental income. Total tenant sales increased while like-for-like tenant sales and footfall were slightly impacted by COVID-19 in the last half of March.
As already noted, our occupancy at our shopping centers remain good at 94.5%. Average rent at comparable exchange rates was also stable. Leasing spreads slightly declined, driven by renewals in Finland, while Sweden and Estonia leasing spreads were positive. As described, we have a balanced tenant mix with over 30% of our revenues generated from necessity tenants. These include grocery, pharmacy, healthcare, social services. In addition to supporting our long-term strategy and serving as a competitive advantage to attract customers, this gives stability during these unusual times. It should be noted that a very small portion of our rent is turnover-based. Compared to our peers, our occupancy cost ratio demonstrates our tenant profitability and supports our position and attractiveness to current and future tenant customers. I will now hand this over to Eero, who can go through the financials in Q1 in more detail.
Thank you, Scott. Good morning, everybody. As Scott mentioned, Q1 was operationally a good solid quarter, and the COVID pandemic only started to impact our numbers from mid-March onwards. Actually, we had two and a half very solid months behind us. Actually, the impact of foreign exchange was larger to our numbers than COVID actually, particularly when we are talking about income statement. Net rental income ended up for the quarter at EUR 52.4 million, and that was reduced by EUR 1.6 million due to the low SEK and particularly the weak NOK. At the comparable exchange rates, actually, our net rental income was higher than last year. On EPRA earnings level, we had EPRA earnings of EUR 34.8 million, which was 2.8% below last year's level. Again, here, approximately EUR 1.4 million was the impact of weaker currencies.
Behind EPRA earnings, basically, we had the net rental income as mentioned. Finance cost was lower than last year by approximately 1.5 million due to the refinancings that we did last year. Joint ventures were lower, particularly to some extent due to the fact that we bought out the SP2 properties that Scott already mentioned, and they were accounted for under joint ventures. The taxes were slightly higher than last year. Anyway, EPRA earnings on a comparable FX basis, as mentioned, were higher than last year. The adjusted EPRA earnings, which was EUR 30.8, includes the recent hybrid bond coupons and fees. This is the additional disclosure that we have started to give. Turning over to the impact of weak NOK and SEK. The graph, you can see that particularly Norwegian crown was substantially weaker.
Actually, the reason of the weakness of Norwegian crown was the low oil price, most probably more than anything else. Fortunately, it somewhat strengthened since the deepest lows, but anyway, ended up close to 20% below end of the last year level. Looking at the net rental income bridge and the components of our net rental income, what were the gains and the negative developments. The acquisition of so-called SP2 properties, Stovner and Torvbyen in Norway increased net rental income by EUR 1.7 million. Previous years' disposals of non-core properties, Duo and Arabia in Finland, reduced net rental income by EUR 1.2 million. The impact of foreign exchange was EUR 1.6 million on the net rental income. Turning over to another important topic, fair value changes. Our fair value changes behind them is the valuation advisory from our appraisers.
Our appraisers in Finland and Sweden were JLL, and in Norway, Estonia, and Denmark, CBRE. Additionally, CBRE made a full valuation on the newly acquired Torvbyen and Stovner, so they are included in the valuation now as well. For most of the other properties, excluding Kista and Lippulaiva, were also fully valued, but all of the other properties, we received valuation advisory. This valuation advisory includes very conservative COVID assumptions, essentially three months rent-free for non-essential tenants across all countries. That was the main source of the negative. On the other hand, we had a gain of the recently acquired sector assets at EUR 35.7 million. This compensates for the negative.
Actually, the full quarterly fair value loss was therefore on our IFRS numbers, EUR 11.8, i.e., reasonably mild number, despite the fact that we took already very conservative assumptions and feel that the valuations are very proper. You can see that also the cap rate slightly widened. Turning over to the net asset value development, NAV development. Also here you can see that the translation reserve, which has to do with foreign equity, the translation of foreign equity, which we have in Norway and Sweden, created a negative difference of EUR 0.78, and in euros, it corresponds to EUR 139 million approximately, and about EUR 118 million relates to Norway and about EUR 20 to Sweden. With stable FX, actually, our NAV would have been EUR 12.14.
The impact of NAV was particularly coming from the weakness of NOK and SEK, which of course, we hope that will be reversed soon. Turning over to main financing targets. Here we were mainly or essentially in line with our own targets. I would like to highlight that our financing is still mainly unsecured, i.e. more than 90% is unsecured, meaning that we have a very large untapped pool of financing, i.e., we have not raised, essentially or we have raised very little secured financing so far and have a very large remaining untapped pool. We had EUR 120 million of cash at the quarter end, and this had to do with some early drawdown from our revolving credit facility, basically to secure the possible repayment of commercial papers. We still had a very substantial liquidity buffer.
Like Scott mentioned, we had drawn EUR 150 million from our EUR 500 million revolver, but still had more than EUR 500 million of liquidity buffer consisting of cash and committed unutilized credit facilities. Our loan to value was 45.7, the IFRS loan to value that is, and it increased somewhat from Q4 2019. Again, much of that had to do with the weakness of NOK and SEK, a good 1.5 percentage units had to do with that. The remaining 1.4, 1.5 percentage points had to do with the fact that the two assets, so actually initially three assets in Norway were acquired and some debt with debt. Turning over to the cost of debt. As mentioned, we have substantial available liquidity. Again, as mentioned, we already did draw EUR 120 million in cash. We also had EUR 127 million of commercial paper outstanding.
The commercial paper markets have started gradually to function, and they were closed for two or three weeks nearly entirely. The recent signs and issuance have been somewhat or quite encouraging, I would say, and we have recently been able to continue to some extent issuing commercial papers. The interest-bearing debt of EUR 2,034 billion, includes also EUR 109 million of SP2 related loan, which you will see also in the maturity structure and NOK 150 million drawdown from the revolver. As Scott rightly mentioned, if in case we would issue any new bonds, euro bonds, particularly, they would be ECB eligible, i.e., the European Central Bank could, under the purchase program, also participate in our bond issues, which is, of course, a huge benefit.
Relating to the outlook, as mentioned earlier, we did withdraw our guidance, and therefore I will be very brief in this respect, i.e., the outlook will not be discussed at this point. Naturally, we hope that we will be able to come back to outlook soon, as soon as the outlook we'll see easier to forecast. With this, back to Scott.
Thanks, Eero. I'd like to continue with a short update on our key development project, Leppävaara, and then give you a few examples of actions we're taking to support our tenants during the COVID-19 crisis. As we've previously indicated, we have suspended all uncommitted CapEx at this point. Pleased that we've been able to carry on our development project in Leppävaara, and the construction is progressing as planned. It hasn't been slowed down at all with COVID, which is a pleasant surprise for us. We're very happy and pleased with that. I would also remind Leppävaara is a prime example of the strategy that we have going forward with a significant residential component as part of it. The appeal of our mixed-use centers was once again demonstrated in April when Espoo City Library agreed on a lease contract with us at Leppävaara.
The library will be located up on the third level. Finally, to conclude today's presentation, just to give you some examples of things we're doing with our tenants and other stakeholders during the crisis. We are, together with our tenants, developing solutions that would help their business. We've already engaged with tens of local shopping center-specific activities and plans to continue this work. This, for example, includes delivery of food and medicines to risk groups, special arrangements for sharing up-to-date information on social media, arrange a drive-in cinema in one of our shopping centers. We've focused on moving away from traffic-generating events to things that really speak to the community and touch people.
We have a program in some of our shopping centers where we have set up a specific wall with hooks where you can leave a coat that you want to donate, and if you are in need of a coat, you can pick up a coat. There's a lot of things like that that we're doing kind of across the portfolio. I would also say that we are, as a company, we have had our crisis management team in place for actually a couple of months now, and we have also developed our strategy team for how we operate in a post-COVID environment, and are working on plans and programs related to when restrictions lift. Certainly, these are very difficult times. I don't want to understate the impact on our business.
However, I think I would be remiss if I just didn't say that I think we, as a company, are fortunate that we're operating in countries, first of all, that have less restrictions. Secondly, that these government assistance programs should help protect and preserve much of our rent. We have a portfolio of shopping centers that have a merchandise mix that should be a bit more insulated from the impacts of all of this. I'm very proud of our management team here and how they've operated in this environment, and I think we are well-positioned to come through this crisis and be even stronger and better on the other side. With that, thank you for your time, and I'll hand it back over to Laura.
Thank you, Scott and Eero, for the presentation. Now we have time for questions, and we will turn the audio line on.
Thank you. Ladies and gentlemen, if you wish to ask a question, please press zero one on your telephone keypad now. If you wish to withdraw your question, you may do so by pressing zero two to cancel. That is zero one to register for a question. We have a question from the line of Anssi Kiviniemi from SEB. Please go ahead. Your line is open.
Thank you. Hi, guys. It's Anssi from SEB. A couple of questions from my side. Kicking off with fair value changes. The negative figure was lower than in Q4, even if one kind of cleans it out. It seems that the cap rates and cash flow assumptions have not so much been touched. Could you please elaborate a little bit on how the discussions have gone with appraisals? It seems that the long-term assumptions for the business and the assets, they are quite intact. Which are the factors that are supporting this, even though kind of we are living in a different world currently? That's the first one. Yes.
Okay. Eero, you want to start? I'll jump in.
Yes, let's do that. We will little bit have to switch because we are in different locations. That's why we communicate here while we speak. Basically, all of the appraisers we have been speaking to think that COVID is a short-term crisis. As a short-term crisis, it needs to be treated as such also in valuations. Like mentioned, the main impact of COVID has been limited to the short-term cash flows. We have taken, in our opinion, as urged by the appraisers, now assumptions which are more than enough in terms of being conservative. Of course, the overall uncertainty additionally has been taken into account as part of the wider cap rates. You will see that our cap rates are, when rounded, the average cap rate was now 5.4, and it was 5.3 previous quarter.
The real change was not exactly 10 basis points. It had to do with some roundings. Main impact, which we think that follows the international practice as well, is the short-term cash flows. Apart from that, the position of our centers and the operation of our centers fundamentally long term has not that much changed.
Yeah. Anssi, if I could add, first of all, Anssi, I think we should have a rule during COVID-19 that anybody who asks a question has to tell us if they're still in their pajamas or not. To answer your question, or to piggyback on what Eero said, I think that three months of free rent is extremely conservative. Particularly with our portfolio, when you look at, you say Norway, 90% of tenants' fixed expenses are being covered by the government, which would include rent. In Sweden, as you know, there's a program for landlords who provide rent relief where they can recoup 50% of that back. I don't think we're in a position where we're going to be giving every tenant free rent for three months.
I think the assumptions by the appraisers are more conservative than I would have otherwise have expected, but we went ahead and accepted that in these valuations, just because there is some unknown with it. Again, I don't see us being in a position where we're going to have to provide that level of rent relief.
I just want to clarify that I'm not in my pajamas currently, so okay on that side. Second question, the footfall declined 9% on like-for-like basis. The tenant sales declined 6% and kind of the COVID impacted basically half a month of your operations. That's how you stated in the financial statement, at least. Does this give a good indication of Q2 net rental income trend, or do you expect to see more stable trend or more drastic changes? How should we read on this?
Listen, I think footfall and sales obviously are going to be significantly down in April. I think we're in the range right now through this part of the month where it's fairly significant. Probably, depending on the country. Sweden, as you know, is much more relaxed. We're not seeing as dramatic a drop in footfall here. In the countries where it's a little bit more restrictive, we've seen a little bit bigger drop. I don't think that translates. Normally, I would say footfall and sales will translate into NRI. Because this is a short-term impact compressed in a few months, hopefully, I don't think that's going to be the case here. Again, as mentioned previously on NRI, there's these government programs which will help offset any relief that we give at this point.
I'm not expecting that that will translate kind of on a like-for-like basis to an impact on NRI.
Okay. Thanks. We have seen a bunch of bankruptcies in retail segment, especially in Sweden, MQ, et cetera. Do you have any exposure to these names? Could you elaborate a bit on that?
Yeah. We have six stores with MQ. I think on an annual basis, it's about EUR 900,000 of revenue. That's in euros, I'm sorry. We have one issue with Halmstad where we're renegotiating the lease. I think those are kind of the big ones for us. We had some exposure in Norway where the parent for Intersport filed bankruptcy. We have some exposure there. That's it. Again, I think, if you look at our tenant mix, we have less exposure in the fashion segment. We haven't felt the impact of these bankruptcies quite as much as you might have thought.
Maybe just to add, you will see or you have seen that in our Q1 numbers, we have increased our credit loss provisions, and we continue to have conservative provisioning against any possible credit losses. The credit losses were now approximately EUR 1 million for the quarter when they were EUR 400,000 one year ago. They have increased but are still at a very sort of moderate level.
Thanks. My last question is on CapEx. You highlighted you are withdrawing everything that is non-committed. Basically, could you give us an indication for 2020 CapEx level and how much you can take the money out of the table?
Eero, do you have that?
We are not disclosing the actual CapEx levels. I don't think that we have done that before. Like Scott mentioned, Leppävaara is a priority, and there we will continue pretty much as we expected. Might be slightly lower than we originally anticipated, but not by much. TIs and maintenance investments, we have been traditionally spending approximately EUR 15 million- EUR 20 million for each on a yearly basis. There we are looking very tightly case by case, but on the other hand, there might be accretive TI investments which we certainly don't want to postpone because those are driving revenues, and this is something. When it comes to maintenance, of course, if it's non-urgent, we are looking into that, and there are savings. Like mentioned, and it doesn't only have to do with CapEx, so we are looking at possibilities to cut SG&A operating expenses.
As you see, our operating expenses already were substantially down from last year, partially, of course, supported by the mild winter, but we have a very tight cost control going on.
Great. That's all from me. Thank you very much.
Thank you, Anssi.
The next question comes from the line of Simon Mathisen from DNB Markets. Please go ahead.
Hi, guys. I'm neither in my pajamas. To clarify that as well. To ask you guys a question as well, not your pajamas, but in terms of how has the rental payments been at the end of the quarter and the prepayment of rent, particularly for Q2, and which sector has paid, which sector has not been able to pay? Can you give us some clarification and help us? Because we've seen other names have been struggling to get rent in.
Yeah.
That's my first question.
At the end of March, I think our rent collection was about 95%, so remained relatively healthy at the end of March. Again, full impact of COVID had not hit yet, but tenants were beginning to feel that impact. I think that some tenants in the countries where there is government subsidies are delaying their rent payment while they make applications for those government subsidies. We've had conversations with them, and that's the case. Again, to answer your question directly on the end of the quarter, it was 95%. I think that's right, Eero.
Approximately there.
Yep.
Normal level, what would that be for you?
Well, I think that this is, of course, a normal level. The optimal level would be 100%, and this was slightly below 100%, but the slight delay has to do with the fact that Scott mentioned that already some tenants were busy filling their applications. Of course, some of them were already feeling the pain. We have reserved appropriately for anything that we feel is serious. For Q2, of course, the amounts will be lower, but it doesn't seem that it would be anything too dramatic or too drastic. We don't have yet all collection dates behind us, even for April, so we don't have exact stats, but money is coming in as a whole.
Okay. My second question will be on the occupancy rate. We can see that the vacancies are going up here year-on-year and Q-on-Q. My question is, how many of that spike is due to the bankruptcies we have seen in the market? How is that impacting the figures? What can you say about the difference between the countries against BC, especially in Norway, where you do have your occupancy going up almost 300 basis points year-on-year?
Down, sorry.
Yeah. The occupancy rate in Norway was tied to a couple things. One was there was a bankruptcy for Intersport, which is a large tenant that we have in some of our shopping centers. That was a portion of it. Another portion of it was more administrative, as we implemented a new software program and reconciled some of our square footages or square meters in the shopping centers. It was basically kind of tying it all together. I would say that overall, we aren't seeing dramatic movement in occupancy. I'm not going to be pollyannish. I think post-COVID, there could be some fallout, but I think we'll have less in these countries that we operate in.
Again, I come from the U.S. where you don't have the kind of government assistance that is being provided here in these Nordic countries, and I think we're going to see the benefit of that policy as it relates to these countries opening back up and businesses being able to open back up and have some solid footing underneath them. As I mentioned before, really, really happy that we're operating in these countries because I don't think we're going to see the kind of fallout that you will see in other countries where there's not this kind of support from the government.
Thank you. My last question is, there's been a very mild Nordic winter. How has that impacted your figures and costs this quarter?
It's helped the cost quite a bit. Eero maybe has some more detail on the exact, but it has helped our business, as Eero mentioned previously. The good news, bad news, it helps you on your cost, but it doesn't help your fashion tenants necessarily as they try to sell winter goods. Thankfully for us, fashion is a smaller piece of our portfolio than compared to our peers. We felt some of it in the sales, but not as dramatic as maybe some others. Eero, I don't know if there's anything else you want to add to that.
Yeah, exactly. If you look at our gross rental income, our gross rental income was down 2.6%, largely to the FX. If you look at our property operating expenses, they were down by 8.4%. The main reason or two main reasons, our savings initiatives, and number two, the mild winter. The mild winter had to do with less snow removal expenses. In a bad snowy winter, we could spend like one or two million extra for snow removal costs, and this year it was very close to zero. Then of course, heating costs are less. We normally get like 75% of those approximately back from the tenants. It's not like we gain 100%, but anyway if operating expenses are down due to mild winter, it of course improves our overall bottom line.
Simon, I should point out I am in my pajamas, by the way.
That's good. Okay, that was all my questions for now.
Okay.
I would like to remind you that if you want to register for a question, you need to press zero one on your telephone keypad now. The next question comes from the line of Nicola Vickery. Please go ahead. Your line is open.
Hello? Sorry.
Hello to the line of Nicola Vickery. Please go ahead.
Oh, yes. Okay. You mispronounced it a bit, but that's fine. Okay, I have a couple of follow-up questions based on the results. Regarding rent deferrals, what has been agreed so far with the tenants where you've agreed to take some rent deferrals regarding the rent payments? Will they be done later this year, or what sort of arrangements have you done so far?
Yeah. Any rent deferrals done thus far have included a payment program where that rent would be repaid by the end of this year. That's the program in place today.
Okay. Second question. We've seen across the, let's say, the Central European market, quite widespread use of material uncertainty clauses. I went through the appraisal reports that you posted, they didn't mention anything about that. Have, let's say JLL and CBRE use these clauses also in basically your appraisals?
Which clauses? That was.
Yes.
Eero, if you got it. Go ahead, Eero.
Yes. I'm not sure if we heard very well because there was something on the line here, but I think that let's say CBRE and JLL are using the same provisions and same assumptions for us as they are using European-wide. At least that's what they tell us. They also make a general health warning saying that during these times of uncertainty, one should exercise even more caution than normal to the valuations. I think that they make some other cautious statements. Apart from that, the main assumptions, like mentioned, has been the three months rent-free, plus somewhat reduced specialty leasing assumptions, plus some assumptions regarding reletting and stuff like that. By far, the biggest relates to three months rent-free assumption.
That's clear. Next question regarding the rent collections for Q2. Of the ones that were due at the beginning of April, let's say first, how much have you managed to collect so far? If you can give some sort of an estimate of the figure so far.
We have not normally sort of published such numbers in anticipation because that relates to Q2, and this is not public information. As Scott and myself just pointed out, the money keeps coming in, and that may be and probably will be less than this 95% that we recorded for March. We are hopeful that anyway, and trust that that will be a sizable number, and there are no indications that there would be very large deferrals. Of course, in all our countries, the government programs are now kicking in. In Norway, the tenants will have access to up to 90% subsidy. In Sweden, we are talking about at least 50%, and even the numbers in Finland are increasing by the week. The final numbers are not known, but we are cautiously optimistic.
Okay. The last question from my line is regarding the densification plans. Is there any update on that, or can we expect more in the H1 results regarding the plans?
Again, for some reason, the line's not very clear, but I think you asked about the densification plan.
Yep.
I'm sorry. There's a lot of feedback. I apologize. Hopefully, you're not hearing it as well. We are continuing the zoning planning process across a large piece of the portfolio. I think in our next investor presentation, which we are working on as we speak, we will provide more details around where we're at in each of the assets. We'll give you asset-specific information. We anticipate having this investor presentation done over the next couple of weeks here. Happy to share more of this with you as we finish this up.
Okay.
We are progressing. I would say the other thing I guess I should talk about is the fact that we are suspending CapEx where it's not committed. A lot of what we're talking about in these densification plans is getting zoning and permitting, and that is not a big CapEx spend. It's more of a time and personnel expense, which we have not slowed down on. We're continuing to push and press on that because we do believe there's value creation there, even without spending much CapEx just by simply getting those zoning rights.
Okay. Thank you. That's all for me.
Great. Thank you.
The next question comes from the line of Rob Virdee from Green Street Advisors. Please go ahead.
He's not allowed to ask a question.
Cheers, Scott. Morning, gents. Thanks for taking the question. I was a little bit late on the call, I'm not sure. I missed it. Could you give me some color into how your retailer sales developed in March? Particularly the third and fourth week after the COVID-19 lockdowns. That's for retailer sales and also for footfall, first of all.
Yeah. I don't have the weekly breakdown on sales. We can get that over to you, Rob. As it relates to footfall, I would say that we went from the second week to the third week. Again, it's interesting. What happened was it dropped pretty significantly when all these measures were first announced and then slowly started climbing back up. It's going to vary country by country. As you probably are aware, Sweden has been much more relaxed as it relates to restrictions. In most of Sweden, the drop-off hasn't been that significant. I would say that we saw a drop-off at Kista primarily because of people who are working from home. As you know, Kista sits in the middle of a very dense office population, and that accounts for a lot of our daytime traffic. That daytime traffic has dwindled.
However, the evening and weekend traffic, which is more local, has stayed relatively consistent. Norway is where we probably saw the biggest drop at the end of March because they had the greatest restrictions at that point. There, I think it was probably in a range of 40% in terms of footfall. Again, I don't have the sales numbers in front of me. Then in Finland, it was somewhere in between. It kind of varies. It's all over the board, again, depending on country. Since you were late to the call, as mentioned previously, normally I would be an advocate for saying you should think about footfall and sales directly in terms of what it means for your ability to push rents.
However, because this is not a drop that is going to be long-term, we don't think, I don't think you could make that same kind of correlation. I think this is a momentary dip, and in fact, Norway, they're starting to reopen much of the country. I think it's a momentary dip and not something that translates into kind of longer-term impact on rents. Also, as mentioned previously, I know in many countries that short-term dip can have long-term implications because you have tenants who have a hard time surviving during that short-term dip. We're fortunate that we're operating in countries with a fair amount of government assistance, a lot of actually government assistance, particularly compared to other countries. I think our tenants will have the ability to rebound more consistently across the board in these countries than it will in other countries.
Okay. That's clear. Thanks, Scott. The second question comes to rents. I did hear some of the answers you've given on rents for Q2. Question is, often they are paid quarterly in advance. Have you changed those terms now? Is it monthly in arrears or is it just case by case for every tenant?
Well, in some of the countries it has already been like monthly payments and particularly in Finland, monthly payment is the norm. In Sweden, actually it's either monthly or quarterly, and we are now mostly turned to monthly in Sweden. In Norway, the market practice is quarterly, so basically quarterly in advance, and now it's mostly monthly in advance. This is also to make the collection easier and make tenants' lives easier. This is what we have done.
Super. Thank you very much.
Thanks, Rob.
There are no further questions registered. I hand back to the speakers for any closing remarks.
I just want to say thank you to everybody, and I hope everybody stays safe and healthy. Laura, I don't know if you want to close the call?
Okay. Also from my behalf, thank you for all your questions. If there are any further questions, please reach out to me or Eero. Well, thanks for attending the call and have a great day.