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Urban Logistics REIT PLC said on Thursday that it had swung to an annual loss, citing challenging market conditions in the property market.
Urban Logistics, a UK-focused logistics real estate investment trust, reported a pretax loss in its year ended March 31 of £82.7 million, swinging from a profit of £171.8 million the previous year.
‘The impacts of Russia’s aggressive and unjustified war in Ukraine, coupled with the short-lived economic experiments by the UK government, have fed through into global and UK inflationary pressures that have defined central banks monetary policy, and in turn the outlook for all sectors of the real estate market,’ Urban Logistics explained.
Urban Logistics recognised a £121.1 million hit from fair value changes in investment properties, compared to a £149.9 million boost a year prior.
The company’s portfolio valuation increased by 9.0% to £1.11 billion from £1.01 billion the prior year, driven by an acquisition of £160 million of assets.
Net rental income increased by 45% to £53.0 million from £36.5 million the prior year.
The company’s European Public Real Estate Association’s net tangible assets fell 14% to 162.44 pence from 188.8p the previous year. Urban Logistics said its net assets fell by 14% to £769.8 million from £892.6 million.
Shares in Urban Logistics fell by 0.7% to 118.60 pence each in London on Thursday morning.
Richard Moffitt, the chief executive of Urban’s investment adviser, said: ‘The portfolio has proven to be resilient against a backdrop of challenging market conditions, with persistently high inflation and rising interest rates leading to repricing of assets across commercial real estate.
‘Our active asset management strategy of moving rents on, improving tenant covenants and increasing lease lengths has allowed us to add value to the assets and shield the company against the impact of a negative yield shift.’
The company declared a total dividend per share of 7.60 pence, unchanged from the previous year.
Chair Nigel Rich: ‘With a full year of income from the properties purchased during the last year, as well as continuing asset management opportunities, we would expect to maintain the same level of dividend in the current financial year.’
Urban Logistics said that due to market volatility, it would be unable to raise money through fundraises to fund a pipeline of acquisitions in the near future.
The company plans to recycle assets that have maximised income and replace them with properties offering lease events. Urban Logistics says that this process of recycling and asset management would add shareholder value in ‘uncertain times’.
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