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IRSA Inversiones Representaciones (NYSE:IRS)
Q3 2020 Earnings Call
Jun 10, 2020, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Santiago Donato -- Investor Relations Officer

Good morning, everyone. I'm Santiago Donato, Investor Relations Officer of IRSA, and I welcome you to the Third Quarter 2020 Results Conference call. As you know, today's live webcast will be held in a new format through Zoom. Nevertheless, both audio and a slide show may be accessed through Company's Investor Relations website at www.irsa.com.ar by clicking on the banner Webcast Link. The following presentation and the earnings release issued on Monday are also available for download on the Company website. [Operator Instructions]

Before we begin, I would like to remind you that this call is being recorded and that information discussed today may include forward-looking statements regarding the Company's financial and operating performance. All projections are subject to risk and uncertainties, and actual results may differ materially. Please refer to the detailed note in the Company's earnings release regarding forward-looking statements.

I will now turn the call over to Mr. Alejandro Elsztain, Second Vice President. Please go ahead, sir.

Alejandro Elsztain -- Second Vice Chairman

Good morning, everybody. Welcome to our third quarter 2020 results conference call. These are difficult times today for everyone, and I hope that everyone, where it is, is well and safe.

As you may know, on March 20, as a consequence of lockdown due to coronavirus pandemic in Argentina, the shopping malls through Argentina were closed, working exclusively those only dedicated to essential activities, such pharmacies, supermarkets and banks. Hotels shut down. And the impact -- but the main impact of this, we are going to see only in the fourth quarter not in this one because only 10 days of operations on this quarter were affected.

In the case of Israel, some business were affected, too, but the supermarkets and agriculture were almost not affected. We can see the net income for the nine months of 2020, and we can share that it was a loss of ARS4.2 billion comparing to a loss of ARS13.4 billion last year, always adjusted by inflation. We are going to see the results of the balance sheet later with Matias.

The adjusted EBITDA reached ARS21 billion in the first nine months. And this increase was 38% comparing to last year and the EBITDA from Argentina increased 6% main -- decreased, sorry, mainly 6% because of the shopping centers, there was a decrease of the sales before the closing and we are going to see the last fourth quarter, probably not sure much more affected and the hotels. So the two were being affected at the end of this quarter. And in the case of Israel, the EBITDA grew mainly because of IFRS affecting Cellcom, we are going to explain a little later.

So now, I will introduce Daniel Elsztain, that will speak about Argentina Business Center.

Daniel Ricardo Elsztain -- Chief Real Estate Operating Officer

Thank you, Alejandro. Good morning, everyone. On Page number 3, we can start on the left side with the shopping malls. Our stock in terms of square meters remained stable at 332,000 square meters. Occupancy remains very stable also at levels of 94.8%. And our sales were reduced by 11.9%. This is mainly explained by the closure of -- the lockdown that started on March 20. But also that last few days before the closure, the lockdown, there was basically nobody at the shopping centers at that moment. But anyways, on this fiscal year -- as of this quarter, I mean, the impact is not well reflected, as Alejandro just mentioned. And recent openings, Alto Noa, our shopping in Salta opened operations on May 8. And Mendoza Plaza shopping yesterday. So, we expect also some new openings from the -- mainly are starting from the provinces and not the city of Buenos Aires yet.

Regarding our office buildings segment, stock went up. Now, we are -- we have 115,000 square meters of producing rent. This is mainly explained by the incorporation of the Zetta building at the Polo Dot office center. Occupancy is down to 93.9%, but this is a very small reduction of what we have on the previous year. And rent is stable at levels of $26.6 per month per square meters, excluding all the common charges that are not here anymore. And operations in the segment of office is normal and collection is also normal, even with this pandemic.

The construction at 200 Della Paolera project, our construction in our office -- new office building on Catalinas, has been suspended since the quarantine. The project was almost 95% done and leasing was 61.5% leased signed. And the work just started very recently with a few restrictions and we were able only to put 40 people on the construction, so that will -- that reduce a little bit the speed, but now we have been granted an 80 people permission to work on the building. So this will accelerate a little bit. We hope to open this building for the first quarter of fiscal year 2021. And as you can see, the progress in leasing is very good.

In terms of hotels, our stocks is the same one with three hotels. Occupancy went down, mainly explained by two factors: one, the deflagging of the what is used to be the Sheraton to now the Libertador hotel; and the second effect is the pandemic itself, even though it only affected a few things. And we're going to see the biggest impact in the near future. And the reduction in rate is the same two effects. Since March 20, there is a complete shutdown and the only hotel that is working on the contingency and emergency plan is the Intercontinental hotel. And it's opened by very, very few and limited operation.

Here, we can see on Page number 4, all the measures taken by the government and the Company since the quarantine was announced. Here, we can see that from March 15 to March 20, it was partially closed operations because there was no traffic. On March 20, there was mandatory quarantine established by the government. There was total closure of borders and activities, educational, recreational and commercial, with the exception of essential one, health, food, banking and among others. The malls were closed in the whole country without those exceptions and we also kept open the pharmacies and supermarkets and banks in those locations that we were allowed to. Hotels were closed with the exception that I said the Intercontinental.

As of May, the mandatory quarantine remains in Buenos Aires City and only working essential activities. And Malls and Hotels remain closed. There were some relaxation and gradual opening of activities in some regions that were less affected, as I explained, the case of Salta, Mendoza and other smaller cities in the country. The reopening of these two shopping centers and we expect also new openings in the interior of the country.

The Company has set a plan with several measures in order to preserve the health of its employees, help contain COVID's spreading and mitigate its effects in our operations. This -- there was established Prevention and Crisis Committee that is working and acting every day. We are also working in home office way in two different categories. First, all those people that are classified as part of the risk group that were defined by the Ministry of Health that are still working in home -- full operational from home. And also, we have an alternate home office for the rest of our corporate office staff. And there was -- there is a contingency plan to support Company's operation. And there was no new programs in operating in this way for the Company and there was no lack of control, there was no problems with any controls and things that let us operating the Company.

So, on Page number 5, we see shopping centers, operations closed since March. The Company decided not to charge base rent and commercial fund during April, May and June also supporting our tenants and prioritizing our long-term relationship with them. We only charged common expenses. If we can see on the right side, what it represent, the common charges only represent about 20% of what we used to charge to our tenants. That was a big relief. Nevertheless, they are suffering a lot. Our tenants were not allowed to sell for a long period of time. And fashion has seasons, and so they are very complicated in many ways. So they thank us and all other operators of shoppings because of these measures. But they are having difficult times.

On the office segment, we have been charging normally. And collection has been very, very good for the months of April and May, very little disruptions but we are happy that this build -- this segment remains very healthy.

In the hotels, there was a shutdown, as we mentioned, and the contingency plan and emergency plan for the Intercontinental hotel that's still under reduced operations.

In terms of expenses, we did all we could we cut off almost everything that was non-essential in terms of expenses and services. And also we are allowed to cut off social security taxes and all the taxes from the government. That helped us to reduce our cost and also the cost that we pass to our tenants.

And in terms of capex, the construction work in Catalinas and Alto Palermo expansion were suspended during quarantine. We restarted the construction, and we expect that we hope with the restriction that we can proceed and get more speed to finalize these two constructions in the near term.

So, now to go to Israel, we're going to go again two Alejandro Elsztain.

Alejandro Elsztain -- Second Vice Chairman

In Page number 6, we can see, as you remember, we own, in the Israel case IDB and DIC. In the case of IDB, there was slowly reduction of the Clal shares. Today, we have a remaining 8.5% of the shares of Clal, plus a 7.1% through swap transactions. And then the other news of the DIC portfolio, we were buying -- as you remember, we distributed from PBC, Mehadrin as a dividend and we were buying shares and we took, again the control of the company, passing 40.6% of their shares. So today, the company running more than 40% has directly controlled from DIC of Mehadrin deferred company.

Other news of the quarter is -- they were appointed two new CEOs, two different persons, one in IDB was Aaron Kaufman and the recently was appointed in DIC, Doron Cohen as CEO. In the case of PBC, as you remember, we have Gav-Yam, that is the rental properties in Israel. And we recently sold 5% of the shares. Now, we are at 29.9% to -- this was mainly because of the Concentration Law asking for not consolidate more that company. So today, we are below this 30% in the rental properties of Gav-Yam.

And in the case of Ispro, as we mentioned, I think in the last quarter, we've begun with the sale of Ispro to one client that finally client breached their contract. And we found a second client. We sold for NIS800 million the equity, and we have some clauses related to the former contract. So, we are in the new sale plus the former sale that breached the contract before. So, this is just to see how the current corporate structure it is.

We can move to the next page, the Page number 7, and in here, we can see that some news about each of the companies in this environment. About PBC, Gav-Yam and Ispro, the real estate, these leading real estate companies running 1.2 million square meters of rental properties through Israel, plus 680,000 square meters of land reserves and 142,000 square meters between HSBC and Tivoli. In this case -- in the case of the rental properties, the office buildings of Israel and United States were very good. The rental was almost very stable, almost nothing affected. But this was an effect in the retail that it's small comparing the retail. In Gav-Yam, it's very small. And in the PBC, it's only Ispro. But there was an effect in the non-essential rental properties but much smaller than Argentina because quarantine time in Israel was much smaller.

In the case of Shufersal, the supermarket company is really spending a very good time. This really record sales, strong growth in the online. The trend expected to remain in the second quarter is very good. So this is one of the big benefit supermarket and pharmacies.

Mehadrin, main producer of citrics and avocado. This was almost normally was picking, packing, sending and selling, so the effect on coronavirus is almost zero. So these companies having normal year.

In the case of Cellcom, this is a leader company in the telecommunications in Israel with 3 million subscribers. Here, there was a moderate decrease in the revenues, mainly the roaming decrease and sales of devices in the quarter and the reduction of the labor cost. There was a change on the CEO here, too. So there was suspension and new cut in marketing expenses. These companies is cutting a lot with the new administration that came to the power a few days ago.

In the case of Elron, the coronavirus really didn't impact in the short-term. And this is the company specializing medical devices, cybersecurity and information technology.

So, now, I will introduce to Mr. Matias Gaivironsky, our CFO.

Matias I. Gaivironsky -- Chief Administrative and Financial Officer

Thank you, Alejandro. Good morning, everybody. So, if we move to next page, on Page 8, we can see the evolution on the breakdown of our debt in Israel, separated by IDB and DIC. It is important to mention that in IDB, we are maintaining certain conversations with bondholders in order to restructure our debt. So, we started some negotiations. There is nothing binding or negotiated yet to comment. But there are negotiation in place. IRSA has a commitment to inject two installments of $20 million, one in September and one -- September this year and the other September next year. This is according to certain conditions. So it's not 100% binding. But it's the only commitment that the Company or IRSA has today to IDB.

So, if we move to Page 10, and regarding our financial statements that we are presenting now. There is important to mention that the COVID-19 only has a limited impact in this financial statement. We will have a major impact the next quarter, mainly affected by our operations in shopping centers and hotels that we will see all the impact of the closure of the -- of our operations in this quarter. So, up to now was more or less normal business. We will review the different segments.

So starting with the net income, we see lower loss this year. So, this year we -- or this nine-month period, we are finishing with almost ARS4.2 billion against ARS13.4 billion. So, trying to explain the major impact or several impacts. The first one comes in the line of change in the fair value that we see last year a decrease in the value of our operation of ARS8.4 billion and only ARS275 million this year. So, we can see that we have a major impact in Argentina that last year remember, and we have all the impact of the macroeconomic volatility and the increase in the cost of capital of Argentina and devaluation that generated at that moment are significant impairment. This year, the impairment is much lower when we measure in pesos that generate again, basically because of the devaluation. So when we measure this figure in dollar terms, we did some impairment during the nine-month period, mainly in the shopping centers and offices and land bank remained stable.

In Israel, we have an impact this quarter that is related to the appraisal of some of the properties of PBC, mainly the HSBC building in Manhattan that we already gave impact on some impairment that we have there.

Then the other important line, the difference came in the line nine, net financial results, that I will explain with a deeper breakdown. And finally, the other important result -- the positive result came in the line 14 that we have the discontinuation or reconsolidation of our Gav-Yam operation, but at the moment that we reconsolidate generated a big gain. That is the difference between the book value of the shares and the market value so that is this important gain that we have in this line.

Finally, the income tax of the Company, we can see also a drop from ARS3.2 billion of gain to ARS2.1 million loss. This is related basically with our deferred tax that we recognized a loss when we appreciate our investment properties and the opposite we generate a gain when we have an impairment. This is related to the deferred tax on the investment property valuation. And also, this year, we have that, for the first time, the impact of the adjustment by inflation in our tax balance sheet, but before there was no adjustment at all.

So with this, we finish with an controlling interest of ARS9.5 billion or almost ARS9.6 billion against a loss of ARS13 billion last year. Something important in the line -- in the Argentina business segment is that, when we see all our cost against inflation, we were able to maintain certain efficiency in terms of margins. Shopping malls remain with the same margin than last year. We have some decrease in the offices but it's more related to how we recognized income last year of our Zetta building that they started operations during the last year and have some impact -- accounting impact there.

So, as I mentioned or going more deeper in the business lines, shopping malls, we see in the adjusted EBITDA a drop of 16.6%. This is before COVID. So only we have 10 days of our malls or 15 days of our malls with the impact. But as we see in the last quarter, the tenant sales have been recovered some before COVID. And we haven't been able to transfer all that sales into our revenues, basically because our fixed component that we have the step-up clause that adjust by certain fixed number close to inflation at the moment what we -- when we signed the contract was lower than what the inflation was. So that affected our base rent. And we started some recovery, but then the coronavirus came and probably we will see lower results going forward.

In the offices, it's a positive result 10% up. Our agreements are in dollars. So basically, we maintain it in adjusted pesos. Same efficiency but we have now a new building under operation that is the Zetta building. So that is the why we increased 10%. The Catalinas building, we expect to see revenues in the next fiscal year. But also, we will have a significant upside because of that building.

Hotels is 33.1% down. As Daniel mentioned, here, we have the deflag of one of our hotels that used to be a Sheraton hotel and now it's our own brand. And also, last year, we have a one-shot effect that generate a revenue or an income that was related to an insurance that we collected last year.

In real estate, sales and development, there was no major news. We did the swaps of the Caballito land and also the Abasto land that will start to generate better results when we -- going forward, when we start the sales of those units.

In the Israeli Business Center, remember that now in real estate we don't have the operations of Gav-Yam. So it's only related to PBC. So it's -- we don't consolidate anymore the Gav-Yam. So, it's only the operations under PBC. Here, the increase when we compare last year with this year, there was a real devaluation between the shekel and the peso of 13%. So to compare apples with apples is 13% is zero. So, we have an increase above that, that is more related to the efficiency in cost that the efficiency in revenues. In telecommunications, in revenues probably we are a little down last year. But here, we have IFRS 16 that the costs related to the infrastructure of Cellcom is not longer in the adjusted EBITDA. So for that reason, we see a significant upside.

So, Page 12, we have the net financial results. Here, we have two major effects: one, came in the line of the Israeli Business segment in the line three, the fair value on financial assets and liability. This is related to Clal. We see in the bottom right of the page a decrease last year of the price of the shares was 2.8%. Today -- this year was 51%. Although we have lower shares or the last shares because we have to sell some shares. But the impact is important and is reflected in this line. The other effect is in the Argentina Business segment, we have more devaluation in -- real devaluation this year than the previous year. Some increase in the net interest, that is also related to the devaluation. Now, in pesos, we are paying more. And some effect in the fair value of our financial assets and liability related to volatility of the market in Argentina.

So finally, before starting the Q&A session, this is our debt profile. As we have been mentioned during the year, we have amortization of our debt during the fiscal year of 2021. This was the challenge -- is the challenge that we have. There was a subsequent event after we closed the period -- the nine-month period that we went to the market and raised 60 -- here is the amount of the face value of the bond $65.8 million that we issued above par. So we received $67 million that will help to face this short-term debt that we have. So, we will have to keep working it to refinance our obligations during the year. We are working in IRSA and in IRSA Commercial Properties in both companies in order to refinance. The good news is that, the local market is open. There is a liquidity in the market in pesos term. So companies like us can tap the market. So that was positive when we compare the cost of the debt that we should is 7% fixed for one year, and that was the fixed. But we issued -- when we issued above par, so we issued 5% for one year and 7% -- 7.3% for two years. So it's also efficient cost for the Company.

So now, we open the line to receive your questions.

Questions and Answers:

Santiago Donato -- Investor Relations Officer

Okay. Now, it's time for the Q&A session. [Operator Instructions] Alvaro Garcia from BTG wants to do the question. Alvaro, please unmute your microphone.

Alvaro Garcia -- Banco BTG Pactual -- Analyst

Thank you, Santiago. Can you hear me?

Alejandro Elsztain -- Second Vice Chairman

Yes, yes. Perfect.

Santiago Donato -- Investor Relations Officer

Perfect.

Alvaro Garcia -- Banco BTG Pactual -- Analyst

Thanks for the call, everyone. And I hope your families are well. My question is sort of on Argentina. More generally, what's your -- from a macro standpoint, what's your best guess as to what a normalization in Argentina might look like as we emerge from COVID over the next couple of months through the summer and into next year? And in terms of what that means for activity for your different assets? Thank you.

Daniel Ricardo Elsztain -- Chief Real Estate Operating Officer

Thank you, Alvaro. I think -- I mean, what we have seen so far is since we open Alto Noa is itself were better that we expected. Traffic was reduced. So, if you measure the traffic was 66% reduction compared to the previous year for the same period of time. But sales were down only 14% compared to last year. And if we see the same-store sales it's 1% up. So that gave us some courage that there is people willing to buy in our shopping centers and all those that go through the Shopping center are less doing tourism and more fully dedicated to go and buy. So we expect that we're going to see that trend, and we hope that we're going to see that trend.

Regarding the opening our centers, as we mentioned, Mendoza and Salta are opened. We expect also -- yesterday was issued a new decree from the province of Santa Fe. So we are expecting to get permission very, very soon to open both our Santa Fe shopping center and Rosario shopping center. And we are working with all the other municipalities and cities to see -- to reopen our shopping centers with very strict protocols of health and measures of -- to avoid any kind of problem in our shopping centers.

Regarding the rest of the business, I mean, as we said, offices are not affected at all. Construction, we expect to do it sooner than we thought a few weeks ago. And regarding hotels, everything seems that they will reopen the borders by September. And as of today, that is the decree. But they might change that. Talking with the municipalities, I mean, some provinces are opening activities regarding tourism. We'll have on July, the -- for us, the winter break. And they are thinking that may allow hotels to do some things during holidays, not with international travelers, but yes, with local. So this is just comments from The Street, but we expect that we're going to see -- what happened in the world, the people was locked for a long period of time. So people want to get out, want to go back to the lives and they will go back to shopping, go back to work and that's what we have been seeing.

Alvaro Garcia -- Banco BTG Pactual -- Analyst

I hear you on that last point. And then just one last question on, how should we think about -- and maybe this is more for Matias, how should we think about IRSA Commercial Properties, the listed entity, as a source of capital over the next couple of months? Is this an asset that maybe you want to buy more of at these levels? Is there -- and then maybe if you could also provide an update on the intercompany loan between Commercial Properties and IRSA, that would be helpful? Thank you.

Matias I. Gaivironsky -- Chief Administrative and Financial Officer

Thank you, Alvaro. So when you see IRSA Commercial Properties, we have an amortization of one bond, the local bond that expire in September. So, we are working in order to refinance that. Probably, the plan A is to try to set up a syndicated loans with different banks here in Argentina. So, we are working on that with some products. Also, there is a chance that we could go to the capital market also like IRSA and Cresud did, but I will say that the plan A is to refinance. We want to preserve liquidity in this challenging context.

Something very positive in the current scenario, and really I am surprised that under the worst stress, we -- you have to think that our operations only close -- our shoppings only close four days per year, and we have this quarantine that is affecting completely the operation. The Company was able to maintain the liquidity. We have the revenues from our offices. So we are doing a tremendous effort in terms of costs. And fortunately, we were able to maintain the liquidity, so even with our shopping malls close. So this kind of -- this Company, and is very high -- EBITDA margin Company, so even with reducing revenues, we maintained the -- how to expand money. So the only thing now is the expenses -- the common expenses in the shopping that the collection more or less was OK. And with the revenues of the offices, we are in good shape.

So, regarding the credit line, the intercompany loan, that we created that credit line because of the context of Argentina and to have more flexibility in managing the liquidity of the Group. Although we have that credit line open, our intention is to refinance always in each of the vehicles. So, this is -- then a proof is what we did in IRSA last 10 days ago. So, we will keep working in each vehicle to refinance itself. But we have that credit line open, that give us more flexibility in this scenario.

Alvaro Garcia -- Banco BTG Pactual -- Analyst

Great. Thank you very much. And again, hope your families are well. And I'll get back in the queue.

Matias I. Gaivironsky -- Chief Administrative and Financial Officer

Thank you.

Santiago Donato -- Investor Relations Officer

[Operator Instructions] Adrian Barolsky [Phonetic] has a question. Please go ahead. Adrian, unmute your microphone, please.

Adrian Barolsky -- Analyst

Okay. Good morning, everybody. Thank you for having. My question is about, if you are looking for a new devaluation of the peso in Argentina, the official change and how it could affect the -- this moment the Company? Thank you.

Matias I. Gaivironsky -- Chief Administrative and Financial Officer

Thank you, Adrian. So you know that we have been suffering a huge devaluation last two years, right? There was a -- sorry, one second. So there was a huge devaluation from '18 to ARS68, and that mainly affect when you measure our EBITDA of the shopping centers in dollar terms. The typical situation is that you automatically reduce your EBITDA in dollar terms, but then recovered in the future through the inflation. In Argentina, always you have devaluation then you have an increase in inflation that in the next periods you recover some in dollar terms.

In the case of the value of the real estate, also there is an impact in the devaluation. When you see our -- what we did and our properties are valued at fair value in the financials. So, we already gave a significant impact in the shopping malls, very, very important in the previous year. At the current levels, I believe that is too conservative. We are valuing our malls at $2,000 per square meter. And if you know in Argentina $2,000 per square meter you won't buy any square meter of the quality of our assets.

So, I think a future devaluation may have some impact, but not a significant impact in the value of our properties. At the end of the day, that real estate in Argentina always was quote in dollars. Transactions are in dollars or according to the dollar quote. So, I think in this kind of scenarios, always real estate was a safe haven against the volatility. There is something that you may see and you will see is that, we can do some disposals of some assets. And there is demand of people that has pesos today in Argentina and want to dollarize, and we'll use real estate to dollarize.

Adrian Barolsky -- Analyst

Thank you so much.

Santiago Donato -- Investor Relations Officer

One more question. Francisco West [Phonetic] wants to do a question. And we close with this.

Francisco West -- Analyst

Hi, everyone. Sorry for my bad English. But I will try to make my question. Regarding the...

Daniel Ricardo Elsztain -- Chief Real Estate Operating Officer

I think if you want to do it in Spanish, we will translate. No problem.

Francisco West -- Analyst

Okay. [Foreign Speech]

Daniel Ricardo Elsztain -- Chief Real Estate Operating Officer

Thank you, Francisco. I will answer you in English first. The first question is regarding occupancy and shopping centers, and the second part of the question is regarding how we calculate percentage of sales. So, in terms of occupancy, what we're showing today is the numbers as of March, right? So there was no impact, basically, just the 15 days that Matias and we all mentioned. Since that moment, we do expect some reduction in occupancy, but it's too early to know. We know that there will be some companies that they would like to reduce their footprint. We know that some companies will have to do it, some moms-and-pops shops will want to get out of business. But it's too early to predict what is going to be like that.

At the same time, what I can tell you is that, we always -- this is not the first crisis we lived. And every time we'll have this kind of situations, we have been working very close to our tenants and we were able to sustain occupancy of those stores that we think that they had a chance to survive. And with those people that make -- really make sense to sustain for a while. So, was -- will -- most probably we'll see that we will do some programs to help some companies and that's what we did in the past. But nevertheless, there will be some impact on occupation, as we are seeing all over the world, some reduction in occupation.

Regarding percentage of sales, we are planning and this is just a planning. We're planning to collect in the -- well, I mean -- this is what we are doing right now in Salta since we are already selling in the shopping in Salta, we're only collecting common charges and represented percentage of sales that we are seeing from each store. Basically, 7% for retail, traditional retail and then we have for electronics and home appliance as smaller number of percentage. But this is typically what we're trying to do and what we did for this month on Salta, but we are going to do also for Mendoza. And we haven't made any decision on Buenos Aires City. We're working how we are going to collection. But the concession is on the basic rent because we don't know what -- I mean, we didn't know what's going to happen and this is only for a short period of time. We are not looking for a long-term concessions. We're always thinking about short-term concessions in the first stage.

Santiago Donato -- Investor Relations Officer

Next question comes from Sam Epee-Bounya from Wellington.

Sam Epee-Bounya -- Wellington Management -- Analyst

Can you hear me?

Daniel Ricardo Elsztain -- Chief Real Estate Operating Officer

Yes, perfect.

Sam Epee-Bounya -- Wellington Management -- Analyst

Oh, thank you. Yes. Thank you, again, for hosting this call. And I hope everyone's families is well, given the situation in Argentina and across the world. I just have a specific question about liquidity over the last couple of weeks, it seems like the government has tightened access to dollar and then forcing companies to tap their dollar offshore liquidity. So my question is, how much cash IRSA has abroad? And what is the total liquidity as of today? And are you feeling comfortable with your liquidity and your plans to address the '21 maturity that you showed? It seems like there is a big wall of maturities due. So in the context of this restriction, I wonder how you can you manage this? Thank you.

Matias I. Gaivironsky -- Chief Administrative and Financial Officer

Sam, thank you for your question. So, basically, today, the liquidity that we have at IRSA level is the money that we raised -- that we just raised it in the local market that are pesos. So our next obligation is the amortization of our 2020 notes that expire in July. So, according to the last rule of the Central Bank, we believe that we are in conditions to buy dollars with the Central Bank. So the -- that will be our intention.

Sam Epee-Bounya -- Wellington Management -- Analyst

Okay. And again, can you remind me of the -- for the 2021? And then what your total liquidity is? So, is it just the ARS70 million that you raised or the ARS65 million plus cash, so you take care of the stub for the '20?

And then the second will be -- the second question is really about the 2021. You mentioned you try to do -- approach a syndicate. I just want to get a bit more color. Thank you.

Matias I. Gaivironsky -- Chief Administrative and Financial Officer

Yeah. So, after the July payment, we have -- the next payment is in August and the following one is in November 2020. So, all our -- most of our debts expire in 2020. Although we have in the presentation as fiscal year '21 because start -- remember that our fiscal year starts in July. So, the next payment we are working in different options and we mentioned that we -- our shareholders meeting approved a capital increase. Also, we are working at IRSA Commercial Properties level with the syndicated loan or a potential new issuance in the local capital market. And also for IRSA we can do something else during the year. So, when you see the liquidity at IRSA level, the money that we have basically cover the July payment. And then we will keep working in the other alternatives.

We have some cash liquidity at IRSA Commercial Properties. So, of course, we will fulfill all the regulations with the Central Bank. Also, as an alternative, Sam, is potential sale of some of our existing properties. There is liquidity in the market. We know there are people that want to dollarize. You don't have many instrument in pesos term with positive interest rates. So we started to see demand for our properties, and you will see some new information in the next days about that.

Sam Epee-Bounya -- Wellington Management -- Analyst

Thank you. I really appreciate it. [Foreign Speech] Ciao.

Daniel Ricardo Elsztain -- Chief Real Estate Operating Officer

Ciao. Thank you.

Santiago Donato -- Investor Relations Officer

Okay. We conclude the question-and-answer session. You have my contact information in the website, Santiago Donato. I will answer all your questions in case you have. This time, I would like to turn back to Mr. Alejandro Elsztain for any closing remarks.

Alejandro Elsztain -- Second Vice Chairman

Just to finalize, these are nine months. Next quarter, we are going to see the majority of the impacts of the coronavirus. It's a real environment. We are seeing -- the goods that we are seeing coming from the Northern Hemisphere and the South Hemisphere, we can see how, when the reopening, the consumption comes. Argentina is in the South Hemisphere and the winter is really in the middle now. So that is the delay, plus the long quarantine the government took. But we see that when they open, the normality comes to the life, construction and which you can see, I don't know in the case of Gav-Yam, the rental properties in Israel, a lot of things under construction, rental properties and a lot of new contracts after the quarantine, too. So, the stories about the consumption changing, the behavior of the human being, maybe they are going to come some, but up to now from the places we are reopening, we are seeing people coming to the offices and asking for more places and buying at the shoppings and go into the hotels, too.

So thank you very much to everybody. Next quarter we finish with our balance sheet, our annual report. Thank you very much for the patience and the new technology we are using. And I hope soon we are going to hug each other and to be closer again as we did in the past. Thank you very much.

Duration: 52 minutes

Call participants:

Santiago Donato -- Investor Relations Officer

Alejandro Elsztain -- Second Vice Chairman

Daniel Ricardo Elsztain -- Chief Real Estate Operating Officer

Matias I. Gaivironsky -- Chief Administrative and Financial Officer

Alvaro Garcia -- Banco BTG Pactual -- Analyst

Adrian Barolsky -- Analyst

Francisco West -- Analyst

Sam Epee-Bounya -- Wellington Management -- Analyst

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