Hansteen Holdings — the pan-European industrial real estate investment trust (REIT) — has reported a surge in six month profits fuelled by a “substantial” rise in the value of its investment properties.
The FTSE-250 REIT, which invests in high-yield opportunist assets across the Netherlands, Germany, Belgium, France and the UK, announced its pre-tax profit for the first half of 2015 had risen to £103.7 million, up from £66.7 million the year before.
In its half-yearly statement Hansteen said its increased profits were driven chiefly by the company making £79 million on the value of its investment portfolio, compared to a £28.8 million last year.
The company’s revenue was slightly lower at £42.4 million, against £43.7 million, mainly due to the strength of Sterling against the Euro. “The increased profits are in spite of a significant weakening of the Euro against Sterling during the period, a fall of 9.9 per cent,” said the statement.
It claimed that if the exchange rate at the end of June had been the same as at 31 December, 2014, the rental income on Hansteen’s portfolio would have been £6.8 million higher and the value of its properties would have been £85.2 million higher.
Despite the adverse movement in the Euro, rental income between January and June was £40.2 million, compared to £37.3 million in 2014. Occupancy rates across all its assets rose by almost six per cent.
The value of Hansteen’s property portfolio increased by 7.8 per cent during the six months, with the group selling its “HPUT2” portfolio — a joint venture between Hansteen and clients of Aviva investors where Hansteen was both co-investor and asset manager — for £192.1 million. It also made £21.5 million in other sales and acquired just over £22 million worth of property.
“The outlook for the business continues to be positive,” said Hansteen’s chairman, James Hambro. “We have a high yielding diverse portfolio of properties most of which were purchased at a relative low point in the cycle and has shown material growth in occupancy, the rent roll and value since.
“We also believe that there is further such growth still to come, accelerated by the proven ability of our Pan-European network of offices and people to maximise occupancy and value.
“Whilst the recent issues affecting the Eurozone and the Euro are unhelpful, our view is that once the immediate volatility calms down the longer term effect is likely to reinforce the ‘lower for longer’ financial environment,” he added.
In total Hansteen owns and controls 42 million sq ft of assets across Europe, but just 2.5 million sq ft are located in the UK. However, the statement declared that of its £693 million end of June assets, 46.9 per cent, £325.1 million were located in Britain and denominated in Sterling. The remaining 53.1 per cent, £368.3 million, were located in Germany, the Netherlands, Belgium and France and denominated in Euros.
In a separate announcement, Hansteen confirmed it had signed a deal to acquire a further £103.7 million of units in the Ashtenne Industrial Fund. Launched in July, 2001, the fund invests in industrial properties throughout the UK. To fund the purchase Hansteen is raising £40 million from a share issue.