Hansteen reports on solid first half

Urban multi-let industrial property investor Hansteen issued its half-year results for the six months ended 30 June on Wednesday, reporting an increase in IFRS profit to £29.2m from £13.3m a year ago.

The London-listed firm said its normalised Income Profit was £13.6m, down from £15.5m year-on-year, while normalised total profit rose to £20.2m from £16.8m.

Its EPRA net asset value per share was 100p after returning 35p of capital, compared to a figure of 131p at the start of the period, while IFRS net asset value per share was 106p also after the 35p return of capital, compared to 135p.

The company confirmed an increase in its October interim dividend of 4.3% to 2.4p per share.

On the operational front, Hansteen’s property valuation increasd 3.7%, or £24.1m, during the period, with 362 new UK leases or renewals made in the half-year at 4.6% ahead of estimated recovery value as at 31 December.

Its IMPT portfolio was sold for £116m, generating a profit of £6.1m over the 31 December valuation, while the Saltley Business Park was compulsorily purchased.

A total of £9.9m in other sales were made, generating profits of £0.3m over the 31 December valuation, with £144.5m - or 35p per share - of capital returned to shareholders in May.

Since period-end, Hansteen said contracts had been exchanged to acquire 34 assets for £57.3m including costs, reflecting a net initial yield of 9.15%.

“This has been a busy and successful period for Hansteen,” said chairman Melvyn Egglenton.

“We have sold the IMPT portfolio, received a down payment for the CPO of Saltley Business Park and returned £144.5m of capital to shareholders.

“Meanwhile, the portfolio continued to perform strongly enjoying substantial valuation growth over the six-month period.”

Egglenton noted that the pace had continued into July and August with the exchange of contracts to acquire the 34 assets for £57.3m, with a rent roll of £5.25m per annum, reflecting the net initial yield of 9.15%.

Joint chief executives Ian Watson and Morgan Jones added that the backdrop to the business remained positive.

“Occupational demand is solid with very limited supply in all our regions,” the pair said in their statement.

“Rents and capital values are growing but at a time when there is no new meaningful supply on the horizon.”

Watson and Jones claimed the investment case for urban multi-let industrials was “stronger than ever”, and increasingly well understood.

“As a result, we continue to see new capital looking to invest.

“A stabilised and diversified portfolio like ours with a robust and growing rent roll provides ongoing solid and attractive returns.”

However, the pair said they remained “committed” to their buy, work and sell business model, and expected to continue to realise investments over the next couple of years.

“As we have shown with the recent acquisition, if we identify opportunities that fit our model we will keenly pursue them but our expectation is that we will be net sellers for the foreseeable future.”