The coronavirus crisis will force more listed European landlords to cut dividend payouts as tenants struggle to pay rent amid the widespread closure of businesses, according to analysts.

British Land Co. PLC, one of the U.K.'s largest listed landlords with a portfolio of mainly office and retail assets, is the latest landlord to announce a temporary freeze on dividend payouts to shareholders. It joins Unibail-Rodamco-Westfield, Shaftesbury PLC, Unite Group PLC, and Deutsche EuroShop AG in withdrawing dividends in response to the crisis.

"We would really expect to see issues with the dividend for a few more [listed landlords]," Colm Lauder, real estate equity analyst at stockbroker Goodbody, said in an interview. "It depends on the segment and the type of property that's being focused on."

Share buyback programs are also exposed to the impact of the coronavirus pandemic. Capital & Counties Properties PLC, which owns the retail-focused Covent Garden estate in London's West End, announced the temporary suspension of its share buyback program as it expects a "disruption to income this year."

Shut up shop

The retail, hotel, and leisure sectors have been hit particularly hard by closures as governments across Europe, which has become the epicenter of the outbreak, impose measures to delay the spread of the virus. Almost 25,000 people have died globally from the virus as of March 27, with more than half a million cases recorded. Italy and Spain have suffered the most fatalities.

JP Morgan Cazenove's Neil Green identified a number of landlords who may have to cut or suspend dividend payouts as the crisis develops. "Considering portfolio exposure, payouts and balance sheets, Eurocommercial Properties NV and Klépierre screen as potential candidates to reduce dividend per share, although there are 10 companies under our coverage that are expected to pay out more than 90% of earnings, using Bloomberg consensus," Green wrote in a March 26 note.

French office landlords Gecina and Icade are both toward the high end of 2020 Bloomberg consensus estimates, which adds risk that expectations may not be met, Green said. Netherlands-based landlord Vastned Retail NV and Nordic-wide retail landlord Citycon Oyj pay out over 90% of their net income and "don't screen well on balance sheet metrics," he added.

Retail landlords, particularly, face a battle to cover their dividends as some of their tenants push for rent relief amid the crisis. H & M Hennes & Mauritz AB (publ), the world's second-largest fashion retailer, is pushing for waivers on rents and service charges for the second quarter of 2020. The Sweden-based company is also pressing for a right to exit leases early if sales do not recover by June, according to a report by the Financial Times.

Associated British Foods PLC, the parent company of fashion retailer Primark Stores Ltd., has withheld £33 million worth of rent from its subsidiary's landlords. The payment was meant to cover rent and service charges for two-thirds of its stores over the second quarter. Burger King Ltd, which has 500 U.K. restaurants, has also refused to pay its latest rent bill.

Retail landlords are in an extremely difficult position as many of their tenants face a battle to survive the complete shutdown of their businesses, Lauder said. "They're going to be facing this scenario where a lot of the pubs and restaurants in shopping centers and high streets, that are closed, will struggle to reopen," he said. "So the hope of recourse for the landlord [in relation to lost rent] is fairly marginal."

The suspension of dividends will continue to impact the share prices of affected landlords as the coronavirus crisis continues, Lauder added, with less affected alternative real estate asset classes such as healthcare becoming more secure bets. "Income focused investors have to find a home," he said. "If a vehicle is not paying you a dividend yield of 4% or 5% per annum, you have to take that away on an annualized basis from the share price."