LONDON (Alliance News) - Ediston Property Investment Co PLC on Wednesday said the rise in its EPRA net asset value over the first half was a "good outcome" in the light of the impact coming from the increase in stamp duty in England and Wales, which were announced in March's Budget.
The real estate investment trust said its net asset value per share rose to 107.21 pence over the six month period to March 31 from 106.49p in September.
"This is a good outcome and should be considered in the context of the negative impact of 0.97p per share owing to transaction costs from two acquisitions and 1.03p per share from the increase in Stamp Duty Land tax in England and Wales in the March Budget," Ediston Property said.
In March, UK Chancellor of the Exchequer George Osborne announced that an incremental band system for commercial stamp duty would be introduced and said that the three percentage point surcharge on additional property purchases will also apply to property investors.
"The knock-on effect of the stamp duty change on the company's independent valuation was to reduce the uplift in valuation from 0.8% to 0.1%," Ediston said.
During the six month period to end-March, Ediston purchased two properties, one Plas Coch Retail Park in Wrexham for GBP22.4 million and the other Citygate, an office building in Newcastle, for GBP19.0 million.
However, Ediston said its shares were trading at a 2.5% discount to net asset value, having traded at a premium of 2.8% at September 30, detracting from the share price total return performance, was a negative 2.1% during the period.
"This is in common with most of the property investment company sector and frustrating given the negative impact on the ability of the company to raise additional equity," Ediston said.
Shares in Ediston were up 0.4% at 105.38 pence on Wednesday.
"The first six months of the year have seen further progress in the company's development. Two acquisitions have been made and there are a number of interesting opportunities to add value in the extended portfolio. Occupational market fundamentals remain strong and, with volatility in the capital market expected, the board will be looking for ways for the company to take advantage of any buying opportunities that arise," said Chairman William Hill.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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