Urban Logistics’ profit slumps as values fall
Urban Logistics REIT has boosted its rental income by nearly 60%, but profit has slumped as values took a hit.
Net rental income for the half year to the end of September was £25.4m, a 59.3% lift on the £16m from the same period last year.
Profit over the period, however, plunged from £50.3m in 2021 to £2.4m.
Urban Logistics REIT has boosted its rental income by nearly 60%, but profit has slumped as values took a hit.
Net rental income for the half year to the end of September was £25.4m, a 59.3% lift on the £16m from the same period last year.
Profit over the period, however, plunged from £50.3m in 2021 to £2.4m.
Adjusted earnings, before valuation changes were taken into account, had increased to £16m from £9.9m, thanks largely to income from the 13 properties bought over the period for £112m.
The REIT’s portfolio has nearly doubled since September 2021, growing from £660m to £1.13bn, driven by acquisitions following its December equity raise.
However, this was overturned by a valuation deficit of £22.2m, a marked shift from the £40.6m surplus chalked up for the same period last year.
Chair Nigel Rich said: “The expectation of higher interest rates to combat the effects of inflation has led to a significant fall in the value of property companies in all sectors of the market. Investors are presumably concerned that valuation yields will rise, putting pressure on the balance sheets of REITs.”
He added: “We remain confident that our portfolio of properties and the strength of our balance sheet will enable us to withstand the economic headwinds. With our LTV at 22% we have the financial resources to purchase further assets as and when our manager sees value in the opportunities.”
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