(Alliance News) - Industrials REIT Ltd said on Friday it swung to an interim loss as pressure on valuations mounted amid macroeconomic headwinds.
For the first six months that ended September 30, the London-based real estate investment trust flipped to a pretax loss of GBP21.1 million from a profit of GBP41.8 million in the prior year.
Fair value loss on investment properties was at GBP36.4 million, compared to a gain of GBP33.0 million previously. Portfolio value decreased by 4.3% to GBP656.5 million as at September 30 from GBP685.8 million at March 31, reflecting yield softening.
But rental income rose by nearly a quarter to GBP18.7 million from GBP15.1 million.
Industrials REIT declared an interim dividend of 3.50 pence, up 3.7% from 3.375p.
The group said demand for multi-let industrial space outstripped supply, with the average passing rent increasing by 29% on new lettings and lease renewals in the six-month period, the highest growth rate achieved to date.
It said like-for-like annual estimated rental value increased by 12% from 5.1% last year, demonstrating the further potential for future rental growth.
The occupancy rate reduced slightly to 92.8% as at September 30 from 93.6% at March 31 as a result of steps taken to forfeit and replace non-performing Covid-era tenancies.
"Strong occupier demand has continued to drive substantial rental uplifts across our UK MLI portfolio over the first half of the year," Industrials REIT Chief Executive Paul Arenson said.
"The group is well positioned to weather pressure on valuations and rising debt costs, given that our group LTV remains low at 26.5% and group debt is 90% hedged," Arenson said.
LTV stands for loan-to-value ratio.
He said the company anticipated that the current macroeconomic headwinds will see the investment market go through a period of repricing.
Looking ahead, Industrials REIT expected to deliver a total full-year dividend of not less than that declared for financial year that ended March 31, when the full-year payout was 6.85p.
It said it was exploring joint venture and third-party management opportunities.
In London, shares in Industrials REIT were 3.3% lower at 134.00p on Friday. But they were flat at ZAR28.00 in Johannesburg.
By Artwell Dlamini; artwelldlamini@alliancenews.com
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