Commercial Property News

In it's H1 results today, Warner Estate Holdings said that revenues were down at £15.6million (September 2008: £23.5million) and that it had a pre-tax loss of £27.6million (September 2008: -£124.7million) which resulted in a negative NAV of -43p.

Warner has sold property under management for £131.9million (4.9% below March 2009 values), but is having discussions with it's lenders with a view to refinancing it's operations. It can continue to trade as it's losses are primarily revaluation losses, which have not crystallised, but despite the disposals the firm has a net debt of £250million, and is in breach of it's banking covenants to RBS, Barclays and HBoS.

Philip Warner, Chairman  commented:

"As I reported in July, the Group's primary objective is to conclude our refinancing negotiations, which are making satisfactory and constructive progress. Thereafter, we shall seek to grow our asset management business, based upon the existing platform of skilled staff managing £1.6billion of property. In the meantime controlling costs and protecting income also remain priorities.

The improvement in sentiment in the property market borught about by increased demand and some capital gowth is encouraging. Asset management experience will be more important than ever and the Group is well placed to provide that expertise".

The Warner Asset management business is in providing services to the Ashtenne Industrial Fund and and the Apia Regional Office Fund, which gives rise to a fee income, which being based on  capital values are £1.8million lower.

 Hansteen Holdings recently took an 18.5% stake in Warner, and any cash rich predator may see the possibilities Warner offers.