LondonMetric has delivered a strong operational performance in its interim results despite a slight drop in net asset value from one year ago.
The group’s net asset value came in at 112p a share down from 114p a share at the same time last year.
However its adjusted profit was £50.9m – close to double the £28m profit of a year ago.
The group, which formed at the end of last year when Metric Property merged with London & Stamford, said its 68-strong portfolio has increased in value by 3.5% to just more than £1bn.
LondonMetric has been focused on repositioning its portfolio capitalising on “310bps of positive yield arbitrage between acquisitions and disposals”.
It invested £160.4m at an average yield of 7.2% compared with sales of £456.7m at an average yield of 4.1%.
This has given rise to a 7.8% increase in LondonMetric’s annual rent roll to £67.4m, and “materially improved” lease lengths.
The group’s wholly owned residential divestment programme is on target releasing £109.4m (81%) of equity to date, with a further £25.6m expected to crystallise over the remaining half year
Chairman Patrick Vaughan said: “The LondonMetric team has worked diligently in their first-half year together.
“Their principal focus has been on evolving the portfolio to focus on areas where we believe we can deliver strong long-term returns as well as securing an income run rate that exceeds the dividend.
“Their efforts to date have achieved excellent operational results, which puts a solid foundation in place for an exciting second half to the year.
“Since the merger we have released £205.7m of equity from our office, legacy distribution and residential portfolio which has been redeployed on acquisitions in our preferred sectors of out of town and retail distribution.
“One of our objectives of covering the current dividend of 7p per annum with sustainable annualised income by the year-end has already been 86% achieved at today’s contracted rents.
“We expect to continue our current pace of strategic acquisitions to further improve the portfolio and capitalise on our strong occupier and financial relationships.”
Bridget.O’Connell@estatesgazette.com
