McKay Securities has revealed a 5% rise in NAV to 250p in its interim results.
The REIT which specialises in South East and central London office and industrial property, said its portfolio rose in value by 3.9% to £226m.
Rental values rose by 0.8% to £16.9m, and the group maintained occupancy at 89.1%.
It said that during the period capital was recycled into new freehold acquisitions in Farnborough and Redhill and that it started refurbishment programmes at Maidenhead, Bracknell and Wilson Street, EC2.
It concluded lettings in Maidenhead and Poyle “on the back of strengthening Thames Valley market post period, ahead of estimated rental value”.
McKay Securities chairman David Thomas said: “Over the period an improvement in reported economic data has had a positive impact on market sentiment and helped the spread of confidence from London to our South East office and industrial markets.
“For the first time since the 2008 downturn, rental values across the western corridor generally have reached a floor.
“They are now set to recover, with improving tenant demand competing for a limited supply of good-quality buildings. An increasing number of investors have recognised this potential for rental growth outside London and capital values have already begun to recover.
“The group is well placed to deliver gains from its existing portfolio, supplemented by recent and potential acquisitions. In the light of these market opportunities, the board will continue to assess the optimal capital structure for the group.”
“With our experience in these increasingly constrained markets, we have the development and management skills to benefit as occupier confidence builds.”
