15th Nov 2016 09:19
LONDON (Alliance News) - Midlands-based real estate investment trust A&J Mucklow Group PLC on Tuesday said its occupancy levels have risen since the end of its financial year, with no adverse effect from the referendum decision to date.
In a statement ahead of A&J's annual general meeting on Tuesday, Chairman Rupert Mucklow said the number of active letting requirements for the group's industrial property assets since the end of its financial year on June 30 has remained steady.
Mucklow said the availability of space the company has in the region has continued to decline, resulting in A&J's occupancy rate rising further to 97.1% compared to 96.8% at June 30, with rental levels "still growing".
Despite initial uncertainty resulting from the Brexit vote, the chairman noted the stability of industrial property values in the Midlands, though said the group has seen "an increase in the supply of investment opportunities, mainly from Institutional retail funds looking to provide more liquidity".
Mucklow said, however, there are still "plenty of active buyers in the market and pricing remains competitive".
A&J recently purchased a 70,182 square foot industrial warehouse in Barton-under-Needwood for GBP5.6 million, and building work is progressing well on its pre-let office development in Leicester, Mucklow said.
Meanwhile, terms have been agreed on the company's first pre-let industrial development in Wolverhampton and the group will soon be submitting a planning application for a 43,000 square foot industrial unit on the phase 1 land.
Contracts have been exchanged on the sale of its 12,00 square foot office building in Henley on Thames for GBP4.1 million, with completion on this deal expected for the the end of this moth. The sale is not conditional on planning, the chairman added.
A&J's total net borrowings stood at GBP82.3 million at October 31, against a property investment portfolio last valued at GBP369.8 million and a loan-to-value ratio of 22%.
Since the end of its financial year, the group has renewed its GBP64.0 million banking facilities with HSBC Holdings PLC for a further five years to 2021 at a 30% lower margin.
The chairman said it was "still too early for us to assess what the longer term impact of leaving the EU will have on the UK economy and our business".
"However, we have been very encouraged by our experiences over the last 4 months and although we anticipate some challenges ahead, we remain positive about prospects for the full year," Mucklow added.
Shares in A&J were up 1.5% at 489.75 pence on Tuesday morning.
By Hannah Boland; [email protected]; @Hannaheboland
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