LondonMetric saw its net tangible assets (NTA) fall 11% in value for the six months to the end of September.
Despite the fall the company said it had posted a “strong operational performance”, with EPRA earnings improving and investors enjoying a 4.5% rise in the interim dividend.
However, Andrew Jones, chief executive of LondonMetric, cautioned that due to the volatile economic environment the business faced a number of challenges moving forward.
“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,” said Jones. “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 real estate strategy, however, is less concerned with short term volatility and periods of dislocation. Instead, we focus on wider macro trends and longer term performance periods with a continued preference for real estate that benefits from evolving consumer behaviour as a result of technological advancement and changing economic conditions.
“With our significant weighting to well-located urban logistics, where there is a broad and deep occupational market, as well as our investment in highly resilient grocery-led long income, we have been able to ride out some of the recent headwinds and again report very strong income metrics and further earnings progression.”
Jones added that LondonMetric’s “all-weather portfolio of quality assets in great locations continues to enjoy strong fundamentals of very high occupancy, long leases and excellent rental growth”.
He continued: “We have continued to actively manage and enhance the quality of the portfolio and the balance sheet, allowing us to grow our rental income, absorb higher interest costs and continue our long term dividend progression. As material shareholders in the business, the management team have strong shareholder alignment and will continue to ensure that the portfolio remains fit for the future.”
