20th Sep 2019 13:33
(Alliance News) - BMO Real Estate Investments Ltd said Friday net asset value declined in its recently ended financial year, as the UK property market continued to be hobbled by Brexit uncertainty, as well as challenges in the UK retail sector.
As at June 30, the property investment firm's net asset value per share was 104.8 pence, down 3.4% from 108.5p on the same date the year before.
Total income for the annual period dropped 72% to GBP11.1 million from GBP39.9 million the prior year, while pretax profit fell sharply by 89% to GBP3.5 million from GBP32.6 million.
Profit performance was hurt by the lower income, as well as a loss on the revaluation of investment properties at GBP7.3 million compared to a gain of GBP14.9 million.
BMO Real Estate said its portfolio total return was 2.9%, underperforming against the MSCI UK Quarterly Property Universe, which returned 3.3%.
The weaker performance was due to troubles in the company's retail assets, particularly the company voluntary arrangement of DIY retailer Homebase, who is a tenant in three properties within BMO Real Estate's portfolio.
This was in spite of strong performances in BMO Real Estate's industrial and distribution property assets.
BMO Real Estate declared a dividend of 5.0 pence per share, in-line with the year before.
"In the year to June 30, open market rental value growth at the all-property level was -0.1 per cent, with falls in the retail sector offsetting a positive performance elsewhere in the market. Investment activity was lower, and that trend intensified in the latter part of the year, moving beyond retail to affect all sectors," said Chair Vikram Lall.
"There remains considerable uncertainty surrounding the UK property market. The effect of this uncertainty is mitigated to a degree by the company's balanced and well let portfolio. At the current time, the more appropriate and attractive use of company resources lies in asset management opportunities which exist within the portfolio," Lall added.
Shares in BMO Real Estate Investments were up 0.3% at 83.23 pence on Friday.
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