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(Alliance News) - Ground Rents Income Fund PLC on Friday said its annual performance had worsened due to regulatory uncertainty.
The real estate investment trust reported its net assets had decreased 2.8% to GBP99.7 million in the year ended September 30, from GBP102.6 million in the year before.
Net asset value per share of the London-based firm was down 2.5% to 103.1 pence from 105.7p the year prior.
Ground Rents's independent portfolio valuation was GBP119.4 million, a 3.9% decline from GBP124.2 million the year before.
The real estate investment trust blamed these worsened results on a challenging environment due to "regulatory uncertainty".
"The regulatory uncertainty means that residential ground rent asset values are heavily discounted compared with historic prices and against other real estate assets offering similar characteristics," Chair Barry Gilbertson explained.
The company did not declare a final dividend but paid a total dividend of GBP3.8 million or 3.96p per share over the year, declined 2.6% from the GBP3.9 million paid the year before.
Nonetheless, Ground Rents affirmed that the UK's strong economic recovery with growth of its gross domestic product, as well as inflation-linked cash flows will support the company in its long-term success.
"Notwithstanding the range of headwinds, rising inflation expectations and an accommodative monetary policy have historically been supportive towards long-term, inflation-linked, heavily collateralised assets such as a ground rent portfolio. These economic circumstances should benefit the company's underlying cash flows, with 71% of the portfolio's ground rent income having some form of inflation linkage," Chair Barry Gilbertson commented.
Shares were down 2.4% at 70.00 pence each on Friday afternoon in London.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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