LondonMetric Property reported a slide into the red on Wednesday, despite a jump in rental income, after higher interest rates hit home.
The London-listed real estate investment trust reported a 14.1% rise in net rental income in the six months to 30 September, to £70.5m, while revenues rose to £71.9m from £63.7m.

However, the reported loss came in at £243.4m, compared to a £254.1m profit a year previously, because of the lower value of its investment properties.

Andrew Jones, chief executive: “Despite very strong operational and income metrics, the material upward movement in interest rates is having a profound impact on real estate valuations. They are the yardstick by which our assets are valued.

“Consequently, the negative sentiment on the future trajectory of debt costs has resulted in a material re-pricing, both in the direct property market as well as in the equity markets.”

EPRA net tangible assets per share fell by 12.2% over the period, to 229.3p, resulting in a total property return of -6.3% and a total accounting return of -10.3%.

Looking ahead, LondonMetric said it expected to see further repricing across the real estate industry, but certain sectors were likely to fare “substantially better” than those more exposed to changing consumer preferences or technological advances.

In recent years, LondonMetric has shifted its £3.5bn UK portfolio away from retail parks, offices and residential into distribution and other long income assets.

Jones said: “We continue to operate in a volatile environment with a number of challenges facing both the economy and the consumer. Sharp movements in both bond yields and interest rates have brought to an end the era of cheap money and is having a material impact on real estate valuations.

“Stability has partially returned, with a moderation in expectations for future rate increases. However, we are expecting interest rates to remain higher for longer.

“Our all-weather portfolio of quality assets in great locations continues to enjoy strong fundamentals of very high occupancy, long leases and excellent rental growth.”

As at 0945 GMT, shares in LondonMetric were off 2% at 186.1p.

Related articles

Ryanair passenger numbers jump 9% in December

Ryanair passenger numbers jump 9% in December

(Sharecast News) - Budget airline Ryanair reported a 9% jump in December passenger numbers on Wednesday. Traffic rose to 12.54 million from 11.52m in the same month a year earlier, while the load factor - which gauges how full the planes are - ticked down to 91% from...

Wizz Are passenger numbers soar in December

Wizz Are passenger numbers soar in December

(Sharecast News) - Hungary-based budget airline Wizz Air reported a strong rise in December passenger numbers as demand continued to rebound from the Covid pandemic. The company on Wednesday said it carried 4,964,857 passengers, an 18.8% increase year on year. For the...

Trending stories

Join our mailing list

Subscribe to our mailing list to receive regular updates!