UK landlords hit by £2.7bn write-downs
The UK’s top property companies and REITs have suffered £2.7bn in gross write-downs on their assets over the past year, compared with just £232m in the previous year.
This was driven by the fall in the value of retail properties, according to research by private investor network Growthdeck’s property investment arm.
The figures cover the top 26 limited property companies and REITs that are members of the FTSE 350, based on annual reports filed in the past 12 months. The year-end dates on the companies’ accounts range from 31 March 2018 to 31 March 2019.
The UK’s top property companies and REITs have suffered £2.7bn in gross write-downs on their assets over the past year, compared with just £232m in the previous year.
This was driven by the fall in the value of retail properties, according to research by private investor network Growthdeck’s property investment arm.
The figures cover the top 26 limited property companies and REITs that are members of the FTSE 350, based on annual reports filed in the past 12 months. The year-end dates on the companies’ accounts range from 31 March 2018 to 31 March 2019.
Among these, shopping centre landlord intu reported write-downs of £1.3bn last year, while British Land took a £620m write-down. Landsec posted an equivalent of £441m.
Andrew White, property director at Growthdeck Property, said: “The major write-downs reported last year show how prices for retail property have been falling.
“Investors looking to buy retail property will need to avoid buying too early or they may find they are catching a falling knife.
“However, if investors look at assets on a case-by-case basis, there may be opportunities to acquire retail properties with strong fundamentals at prices that compensate for the risk.”
Michael Ross, a fellow property director at Growthdeck Property, added: “A blanket devaluation of retail properties means that there could be hidden gems if investors know where to look. Not all occupiers are financially equal.”
Growthdeck launched its commercial property investment division in June. It allows investors to buy shares in individual UK commercial real estate investments, with a minimum investment of £5,000.
The property team is headed up by White, who has managed assets for institutions including AXA SunLife and TSB Life, alongside Ross, the founder of Buckingham Homes.
Xavier Pullen, joint founder and former managing director of Capital & Regional, is its chairman.
Growthdeck Property will focus on value-add opportunities across all sectors UK-wide, initially in the £2m-5m price range, with a target geared return of 10-15% per annum.
The platform’s investors will provide around half of the capital, with external debt finance making up the balance.
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