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BMO Real Estate Outperforms Benchmark; Reports Lower Net Assets

Thu, 26th Mar 2020 16:56

(Alliance News) - BMO Real Estate Investments Ltd on Thursday reported lower net asset value in the first half of its financial year, but outperformed its benchmark.

The stock closed 17% higher at 55.00 pence each on Thursday in London.

The property investment firm - formerly known as BMO Real Estate Investments Ltd - reported net asset value per share of 102.6 pence at the end of December, down from 106.0p reported a year prior.

BMO's share price total return at the end of the period was 8.2%, with shares trading at a discount to the net asset value of 18% widened from 13% a year earlier. As at June 30, the discount to NAV was 24%.

The company's property portfolio produced a total return of 1.3% over the six-month period, outperforming the MSCI UK Quarterly Property Index, which recorded total returns of 0.4%.

BMO declared a second interim dividend of 1.25p in addition to its 1.25 first interim dividend payout, paid in December.

The company said performance was hurt by challenging conditions in the UK commercial property market borne out of political and economic uncertainty and an investment hiatus linked to the general election, as well as continued weakness in the retail market.

Looking ahead, it noted that the Covid-19 outbreak presented a risk for the global economy, adding that it believes predictions that the market will bounce back by the middle of the year to be short-sighted. It said that although it has limited exposure to development, leisure and restaurants and no exposure to the other hospitality and healthcare sectors, it expects future revenue to be hurt.

"There is potential for a change in consumption patterns and working practices that could have lasting consequences for consumer behaviour. We see potential disruption to construction projects. In the current environment of enforced social distancing it is unreasonable to expect occupiers to engage in leasing decisions and we expect a pause in any transactional activity which could extend for a number of months," said Chair Vikram Lall.

By Ife Taiwo; ifetaiwo@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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