BMO Real Estate Investments has reported that its industrial-led portfolio has delivered an ungeared total return of 2.9%.
The company said this was due to a relatively high income return and high-performing South East industrial assets accounting for 40% of the portfolio.
Income return was 5.3% for the year ended 30 June 2019 .
Vacancy rate across the portfolio was 0.1% and the average weighted unexpired lease term was 5.8 years.
BMO Real Estate Investments said capital projects and asset management initiatives had helped deliver 4.4% gross income growth (like-for-like rent receivable) over the course of the year.
The firm has also continued to rebalance itself by disposing of assets from its retail portfolio.
Vikram Lall, chairman of BMO Real Estate Investments, said: “In an environment of valuation falls, both at the market and portfolio level, performance was income driven.
“There remains considerable uncertainty surrounding the UK property market. The effect of this uncertainty is mitigated to a degree by the company’s balanced and well-let portfolio. At the current time, the more appropriate and attractive use of company resources lies in asset management opportunities which exist within the portfolio.”
Peter Lowe, fund manager at BMO Real Estate Investments, added: “The strategy to maintain a comparatively high exposure to the industrial and logistics market and allocate company resources to asset management initiatives within the regional office portfolio have been key factors in the delivery of medium-term outperformance.”
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