Confidence in London and alternative sectors has held up while retail continues to suffer, the latest batch of half-year REIT results for the 2018/19 financial year have shown.
Landsec, whose portfolio and NAV were both down by 1.4% in the six months to 30 September, fell victim to ongoing challenges in retail. The value of its retail portfolio was down by 3%, while offices remained stable. Rob Noel, chief executive of Landsec, said the REIT remained confident in London and was looking for opportunities to deploy capital in the city.
British Land, the other major mixed-portfolio REIT, similarly saw its NAV fall by 2.9% and portfolio valuation fall by 1.9%. Both Landsec and British Land are cutting their exposure to retail, the latter having sold £634m of retail assets in the past year.
NewRiver REIT emphasised a drive to diversify its portfolio after reporting a 3.1% fall in NAV and a valuation decline of 1.8%. It is on track to sell 5% of its portfolio this financial year and is developing a residential portfolio of 1,300 homes to complement its retail assets.
By contrast, Workspace and Big Yellow were relative winners. Workspace saw its portfolio of flexible London offices rise in value by 2.6% to £2.4bn. Its NAV rose by 3.7%.
Self-storage operator Big Yellow delivered growth in its NAV (3%), its portfolio value (3.8%) and earnings per share (9%).
Meanwhile, Shaftesbury released its full-year results, showing mixed results. Its retail and leisure-led portfolio was up by 4.1% this year but much of that growth happened in the first half before slowing down considerably in H2.
Despite strong occupancy demand, the company said the average period to let space was rising as occupiers become more cautious.
- 13 November Landsec eyes new London development amidst Brexit uncertainty
- 14 November British Land NAV falls 3%
- 14 November Workspace Group posts 3.7% NAV rise
- 20 November Big Yellow H1 pretax profit falls 22%
- 21 November NewRiver looks to diversify as NAV drops
- 27 November Shaftesbury profit hit by slowing valuation growth
- 29 November LXi reports active six months of portfolio growth
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