12th Nov 2013 12:43
LONDON (Alliance News) - Real estate investment trust A&J Mucklow Tuesday said the vacancy rate across its portfolio has dipped to 6.2% at the end of November compared with 6.7% in June boosted by letting enquiries, while it is seeing signs of a pickup in investment activity in its region.
In an interim management statement for the period July 1 to November 11, the company which develops property in the Midlands said rental levels on prime and good secondary industrial properties are poised to grow, helped by an increase in occupier demand, limited available stock and the continued decline in letting incentives.
Mucklow said business confidence across the Midlands had gained momentum on the back of better economic forecasts and success in the manufacturing and automotive industries.
"The regional investment market has also picked up since 1 July 2013, with a number of industrial transactions having been completed, at much higher values than expected," it said.
In turn investor appetite for property remained strong, due to the high expectations of rental growth and capital appreciation.
Mucklow bought one investment property during the period for GBP3.7 million producing rental income of around GBP0.3 million a year. The property is located in Halesowen, West Midlands and comprises a modern 62,000 square foot industrial unit with expansion land.
The firm has also agreed terms to build a new distribution warehouse at Apex Park, Worcester. The deal, with Worcester Bosch, is subject to planning and conditional on Mucklow taking back Bosch's current unit of 50,000 square feet on completion of the development.
A planning application will be submitted shortly and if successful, the new property would be operational by December 2014, at an initial rent of GBP0.7 million a year.
Net borrowings at October 31 stood at GBP77.0 million, while undrawn bank facilities totalled GBP30.5 million. Debt to equity gearing remained at 41% and loan to value at 29%.
The stock was trading at 495.85 pence, up 0.85 pence or 0.2% Tuesday.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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