7th Nov 2024 12:06
(Alliance News) - Urban Logistics REIT PLC on Thursday said profit fell nearly 50% during the first half of its current financial year, as the logistics property investor said empty space has taken longer than expected to rent out.
The UK-focused real estate investment trust said pretax profit for the six months that ended September 30 was GBP10.2 million, down 49% from GBP16.9 million a year prior.
Gross rental income grew 3.0% to GBP30.6 million from GBP29.7 million. Total property return for the six-month period was 2.4%, compared to 2.3% last year.
"Whilst there has been successful asset management during the period, it has taken longer to lease voids than anticipated," Urban Logistics said. "This, combined with a number of tenant administrations, has increased the vacancy rate to 8.1% from 6.8% in 2023, which has impacted revenue growth, and has increased property operating costs by GBP1.4 million, driven by increased security costs at vacant sites."
Property operating costs increased 29% overall to GBP1.6 million from GBP1.2 million.
Urban Logistics declared an interim dividend per share of 3.25 pence, unchanged from last year.
Investment Adviser Chief Executive Officer Richard Moffitt said: "The first half of the financial year has been a highly active period for Urban Logistics, which has not only delivered a refinancing of one of its debt facilities, but also demonstrated the company's ability to make attractive acquisitions in the current market place. The refinancing has delivered a 47 basis point reduction in the margin the company pays, extended the maturity of the near term debt and provided additional investment capital at attractive rates.
"Looking forward, we see significant value potential within the portfolio, which the company will continue to realise through the team's hands-on approach to asset management, as well as the recycling of the value created in core assets into higher yielding assets as the company drives for full dividend cover."
Looking ahead, Chair Nigel Rich said: "Our belief in the strong prospects for the sub-sector of the property market in which we operate continues to be validated by growth in rental rates at our properties, driven by the fundamental supply and demand mismatch for this type of space."
Shares in Urban Logistics were up 0.6% at 111.70 pence each in London on Thursday morning.
By Emily Parsons, Alliance News reporter
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