The Howard de Walden Estate has reported an 8.2% boost in rental income, from £117.8m to £127.5m, off the back of new lettings at revamped office and medical buildings, rent reviews and income from recently acquired office buildings across its 92 acres of Marylebone real estate in central London.
Medical lettings made up a third of the estate’s rental income in the year to 31 March 2018, totalling £42.1m, with residential and office lettings accounting for 23% of rental income each, totalling £29.5m and £28.8m respectively.
Like-for-like portfolio growth slowed from 4.7% in the previous financial year to 3.3%. The value of the estate’s residential holdings decreased in value, though the value of offices and medical properties increased. As of 31 March 2018, the value of the entire portfolio stood at £4.4bn.
Cash at bank and in hand was £68m, while the estate’s total borrowings stood at £468m.
Sir William Proby, chairman of the Howard de Walden Estate, said: “We continue to focus on building our rental income, both commercial and residential, rather than capital value. This is because rental values are linked to economic activity, whereas capital values are influenced by extraneous factors such as changes in interest rates, exchange rates, property taxes and regulation.
“Looking forward, the major issue influencing economic activity is the uncertainty emanating from the Brexit negotiations.
“Clearly, there are risks in both directions, depending on an outcome that is impossible for anyone to predict at this stage.
“However, investment and equity markets have been resilient, considering the slow progress made. London is a world-leading city and I am optimistic that it will continue to be so after Brexit is concluded.”
Andrew Hynard, chief executive of the Howard de Walden Estate, added: “As the clock counts down to the EU exit date, however, it looks more likely that the withdrawal process will be disorderly, with political instability and economic stress.
“The property cycle has enjoyed an unprecedented period of low interest rates and in the same period London has consolidated its position as a global city.
“We have been a significant beneficiary of these dynamics for several years and recognise that a correction is overdue.
“Despite this caution, we remain optimistic that the group will continue to achieve long-term success.”
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