McKay Securities has welcomed the return of workers to offices across its portfolio, noting a rise in letting activity in its latest set of results.
The REIT, which invests in offices as well as logistics properties in the South East of England, said adjusted profit for the six months to the end of September stood at £4.1m, down 22% from a year earlier due to a 12.3% drop in rental income to £11.2m.
Net tangible value per share was up at 322p from 309p, while the company’s portfolio valuation increased to £454.9m from £437.9m a year ago.
At the end of the period, roughly 65% of the company’s portfolio was in offices, and 30% in industrial and logistics.
Chief executive Simon Perkins (pictured) pointed to three factors that he believes underpin the results and the company’s scope for growth.
“First is the re-emergence of the South East and London office markets and the continued strength of the industry and logistics market,” he said. “Second, the growth potential of 25% portfolio reversion, focused on buildings under refurbishment and taking the opportunity of lease expiries over the period to put in place those improvement works to give ourselves the best opportunity to benefit from post-Covid demand. And thirdly, we sold 30 Lombard Street last year… and we’ve got the headroom to reinvest those proceeds.”
The company made no acquisitions or disposals during the six months, although it has since bought the Evergreen Studios office complex in Richmond and is looking to offload its Planets scheme in Woking pending planning permission for a residential development, as well as Great Brighams Mead in Reading.
The pricing for more opportunistic stock is beginning to get to levels where you can look at going in and investing money on refurbs and so on,” Perkins said of the company’s “patient and selective” approach to new acquisitions. “It’s trying to make sure we’re getting in at the right pricing level.”
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