FINANCE: LondonMetric has posted a NAV per share of 128.5p per share for the half-year to 30 September, an uplift from 111.8p over the same period a year ago.
Reported profit increased by 58%, from £44.1m over the period in 2013 to £69.7m this year.
The group also reported a revaluation surplus of £52.3m – a portfolio uplift of 4% – which drove the NAV growth alongside retained profits.
LondonMetric, which primarily invests in out-of-town retail and distribution properties, said it was benefiting from “structural shift” in shopping patterns, as convenience and online retailing grows.
Chief executive Andrew Jones said he expected distribution centres to comprise 50% of the group’s portfolio in a year’s time, up from 35% currently.
“Retailers need more ‘fit for purpose’ distribution space,” he said.
LondonMetric’s property portfolio yields compressed by 28 basis points, of which 25% was owing to asset management and development work.
The group’s loan-to-value ratio, meanwhile, stood at 38%, up from 30% as of September 2013. The weighted average cost of debt was 3.7%.
After the period end LondonMetric also increased its debt facility with Helava to £196.2m on a new seven-year term.
The group’s investment portfolio now has a 99.7% occupancy rate, with a weighted lease length remaining of 12.7 years.
LondonMetric’s cash resources of £55.5m will increase to around £100m following the completion of the disposal of One Carter Lane, EC4.
Some 81% of its portfolio comprises retail-led distribution and out-of-town retail, rising to 89% after the end of the reporting period, while 35% of the firm’s assets comprise distribution centres, in line with a strategy outlined in May 2013 to increase exposure to this sector.
LondonMetric chairman Patrick Vaughan added: “The retail occupier market continues to go through seismic changes as consumers modify their shopping patterns. This is having a profound impact on the number and size of stores that retailers want and is prompting retailers to actively ‘rightsize’ their existing store portfolios.
“This is particularly prominent in the food sector where the growth in convenience and online shopping is having a significant impact on the larger superstores. It is only a matter of time before this has a negative impact on the value of those large stores that occupiers no longer consider economically fit for purpose.”
chris.berkin@estatesgazette.com
