Life Science REIT has nearly doubled its portfolio over its first full year as it racks up loses in pursuit of growth.
The lab-focused REIT’s valuation stood at £387.6m at the end of 2022, according to its latest annual results, up from £192.2m a year before.
While rent has climbed to £13.1m from just £500,000, profit has fallen from £7.7m to a loss of £27.5m. The REIT’s contracted rent roll is currently £17.2m, with occupancy at 82%.
The fall reflects a £31.3m decline in the value of its properties against the price it paid, a 7.5% reduction on book value.
The REIT said: “The vast majority of the fall is attributed to the 2022 transactions where acquisitions and purchasers’ costs were the main contributor. The remainder was on the like-for-like portfolio where a 29bps outward yield shift in the year was partly offset by a 4.7% like-for-like growth in ERV, reflecting the embedded value in the overall life science sector.”
In December 2021, the REIT’s NAV was £350m, based on £192m of property and the rest in raised cash. IFRS NAV is now £319.5m, with 16.8% LTV.
Chair Claire Boyle said: “We have delivered on the promises we set out at our IPO in November 2021. We achieved our goal of fully deploying the IPO proceeds within six months, completed our move from AIM to the main market and met our dividend target. Our focus now is on executing our business plans for each of the assets, to drive capital values and income growth whilst embedding rigorous ESG practices in all our operations.”
Simon Farnsworth, managing director of the REIT’s investment adviser, Ironstone, added: “The group continues to benefit from the enduring strong occupier demand and ongoing limited supply of suitable space for life science companies in the Golden Triangle, and we expect this imbalance to continue to drive lettings and rental growth in the future.”
The REIT pointed to a number of lettings after the year-end date, including at Rolling Stock Yard, along with its ongoing development at Oxford Technology Park.
Farnsworth added: “We will continue our development programme at OTP, where we are targeting to complete a further 388,100 sq ft of space by mid-2024.”
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