The growth of the London commercial property market has provided a boost for Helical Bar, which today released results showing that, in the year to the 31st of March, the value of the firm’s portfolio rose to over £1 billion.
Although pre-tax profits during the year failed to match the staggering £101.7 million achieved in the previous year, the total remained impressive at £87.4 million – the second highest recorded in the company’s history. Furthermore, Helical Bar lifted total property returns by 11 per cent to £155.3 million, with trading profits of £2.5 million contributing significantly towards this total.
Of course, the stand out area in the firm’s portfolio during the year was London, as a 27 per cent valuation increase to £370 million hugely outperformed 2014’s gains of 18.6 per cent. However, Helical Bar also continued to focus upon portfolio growth within the regions, allowing gross rents in this category to rise to £27.3 million, representing yields of 6.5 per cent on £420 million.
Chief executive at Helical Bar, Michael Slade, believes that the firm’s current strategy is ensuring a high degree of year on year success.
He says; “Our strategy of investing and developing in London whilst maintaining a high yielding regional investment programme continues to bear fruit.
“We expect our London portfolio to continue to provide significant surpluses over the next few years as rental levels grow and we complete and let our development schemes.
“We have seen good demand from occupiers for the assets in our portfolio and strong interest in those types of assets from institutions – this is leading to a rise in both rental and capital values as the UK economy strengthens outside London.”
During the year, Helical Bar continued to pursue its regional strategy of offloading secondary retail destinations in favour of high yielding distribution warehouses, offices and retail parks. As a result, the regional portfolio is now comprised of 25 per cent office space, 14 per cent in-town retail units, 24 per cent retail parks and 35 per cent industrial or logistics properties, with just 2 per cent dedicated to other categories.
As a result, the regional offices aspect of the portfolio enjoyed a 12.2 per cent valuation increase, largely thanks to the performances of both Churchgate and Lee House in Manchester. The sale of regional assets as a means of rebalancing the portfolio saw trading profits rise to £2.5 million, comparing strongly to 2014’s £0.3 million result.
Mr Slade concludes; “In the regions, we have completed our rotation out of secondary shopping centres and into high yielding distribution warehouses, regional offices and out-of-town retail parks.
“With the General Election behind us we can look forward with confidence to a more stable domestic political situation, which should help the UK economy to grow, and we anticipate providing shareholders with continued strong growth in the value of our business.”
Previous Post
Strong Retail performance set to boost Market Activity
