14th Jul 2016 07:33
LONDON (Alliance News) - Real estate investment trust McKay Securities PLC on Thursday said its markets continue to be characterised by low levels of supply of modern business space and said it is well placed to respond to tough market conditions resulting from the UK vote to leave the European Union.
In a statement to be made at McKay's annual general meeting, Chairman David Thomas said "since the vote, sentiment towards the property sector has turned more negative and share price volatility has reflected this sentiment".
The chairman said that investment decisions have been delayed within the sector until the economic and political consequences of the vote to leave the EU have been "better qualified".
"However, the asset class, and this company, retain many positive characteristics, and the impact on rental and capital values remains dependent on how our occupational markets respond to the vote," Thomas said, adding that these markets "continue to be characterised by historically low levels of supply of modern business space, which has contributed to recent rental growth".
"With a limited development pipeline and increasing building obsolescence, supply constraints look set to continue and to date, portfolio lettings agreed ahead of the vote have been unaffected," the chairman said.
McKay said it was well placed to respond to these market conditions, and, in the three months ended June 30, said its letting progress and portfolio management has continued to realise its significant portfolio reversion and strengthen its income profile.
"We are not exposed to any one market with 58% of the portfolio in the South East office sector, 18% in South East industrial property and 18% in central London offices. This geographic and sector diversity provides us with a broad tenant base which has historically proved highly resilient," Thomas added.
Shares in McKay were up 0.7% at 175.00 pence on Thursday.
By Hannah Boland; [email protected]; @Hannaheboland
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