McKay Securities plc, the only real-estate trust (REIT) specialising exclusively in the London and South East office and industrial markets, has announced its half-year results for the six months ended September 30, 2017.
- Net rental income up 8.2% to £9.92 million (September 30, 2016: £9.17m)
- Adjusted profit before tax up 6.2% to £4.70m (September 30, 2016: £4.42m)
- Property valuation up 5.3%, to £452.65m, generating a 2.7% (£11.94m) surplus over cost
- 5.3% increase in contracted rental income to £24.66m pa, supported by recent lettings
- 4.3% increase in rental value (ERV) of the portfolio to £34.08m pa
- Good progress achieved in unlocking income and valuation gains though actions;
- Redevelopment schemes generating gains, aided by the full letting of 9 Greyfriars Road, Reading
- Redevelopment of 30 Lombard Street, EC3 on track for delivery in mid-2018, with a marketing campaign now underway
- Planning consent achieved in October 2017 for the redevelopment of up to 134,430 sq ft of warehouse and distribution floorspace at Brunel Road, Theale
- Continued focus on realising value, evidenced by disposal of Albion House, Newbury in October 2017 for £1.43m, 43% ahead of March 2017 valuation
Simon Perkins, chief executive of Reading-headquartered McKay Securities, said: “Our results are up on all key metrics. This continued growth is the direct result of building up a carefully selected portfolio over the last few years, and our ability to enhance and release its potential. We are putting our assets to work and delivering value for our shareholders through active asset management, securing major lettings and delivering planning and development gains.
“Our clear focus on London and the South East, backed by our on-the-ground presence in these markets, remains at the core of our success. A particular highlight during the period was securing the letting of 9 Greyfriars Road in Reading which we transformed from an unloved office block into a modern, award-winning work space, which is now fully let to a major co-working operator. As a result of this and other initiatives, our contracted rents have risen a further 5% during the period – and over 40% since our Capital Raising in 2014.
“Looking ahead, there remains significant levels of income potential within our portfolio to realise on behalf of our shareholders. While the pace of gains remains in part dependent on the health of the occupier market, we have a high quality portfolio of diverse assets in sought after locations which puts us in a strong position for the future.”