23rd Feb 2016 09:16
LONDON (Alliance News) - McKay Securities PLC on Tuesday said it had made good progress in in the second half as the property company boosted its occupancy rate and maintained a high tenancy retention rate.
The south east and London-focused office and industrial real estate investor said it remains "on programme" with all three of its speculative office schemes, which make a significant contribution of GBP6.0 million to its total estimates portfolio reversion of GB910.0 million. Two of the sites should be ready for use in mid-2016, the company said, whilst the third will be delivered in 2018.
Mckay also reported a rise in its occupancy rate to 94.0% at February 23 from 92.7% at the end of the first half of its financial year on September 30. The company made thirteen market lettings over the five-month period to February, at a combined contracted rent of GBP740,000, which was 5.6% ahead of its valuer's estimates in September.
McKay maintained a high retention rate of tenants of 64%, adding that tenant demand had remained "resilient" so far. Demand in the South East office market was 9.3% higher at the end of 2015 than at the end of 2014.
"This continues to be driven by obsolescence of existing space, companies with plans for expansion and consolidation, and a gradual increase in the number of enquiries from London occupiers looking for the combined benefit of lower occupational costs and Crossrail or mainline improvements," said Simon Perkins, managing director of McKay.
"The prospects for rental growth from this imbalance between supply and demand continues to support our strategy of positioning the portfolio within these markets," Perkins added.
McKay shares were untraded on Tuesday, having last traded at 238.00 pence.
By Hannah Boland; [email protected]; @Hannaheboland
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