(Sharecast News) – Real estate investment company London & Associated Properties swung to a loss in the first half as interest-rate increases had a significant impact on trading, and resulted in a huge write-down of one of its key properties.
The company reported an operating loss of £0.4m for the six months to 30 June, compared with a profit of £21.8m in the first half of 2022.
Regarding interest rates, chairman and chief executive John Heller said: “Not only have the additional costs damaged operating performance, but negative sentiment has meant that the investment market for asset sales is becoming more uncertain.”
LAP has listed its Orchard Square property in Sheffield for sale, after having to write down its value by £2.1m to £12.65m in the run up to the September 2023 expiry of a loan. Orchard Square is one of the company’s three principal assets.
“During this period we have sought to refinance the loan, but due to prevailing market conditions, this has not been possible without a significant equity contribution which we do not feel would be in shareholders’ interests,” LAP said.
“This is a disappointing outcome for a property that had performed well over our 24 year ownership,” said chairman and chief executive John Heller.
The company said the remainder of its portfolio is performing satisfactorily, with revenues from property activities dipping from £3.3m to £3m year-on-year, reflecting the disposal of a West Bromwich shopping centre back in July 2022.