Commercial Property News

A.J. Mucklow Group Plc, the Midlands-based REIT, reported today a good H1 performance, raising occupancy from 90% to 92%, reducing gearing from 24% to 20% and improving it's NAV 8% to 288p.

The Group pre-tax profit for the half year was £18.8million, compared with a loss of £38.8million for the corresponding period last year. A surplus on the revaluation of investment properties and development land, increased the profit by £11.6million (2008: £44.5million reduction).

The availability of industrial space across the Midlands continued to increase during the first half year, while the occupier market remained weak and competition to attract tenants was strong. Void rates are now so punitive, that rental levels are being heavily discounted and lease terms are getting shorter, in order to secure lettings and save costs.

Rupert Mucklow, Chairman of A&J Mucklow Group plc said:

"I am pleased to report a solid performance by the Group for the first six months of our financial year, despite a sluggish property market."

"Our financial position remains strong and has been further improved by the extension and increase of our principal banking facilities, a reduction in void levels and the successful disposal of a trading property."

The Group anticipate that capital values for modern investment properties will continue to improve in our second half year due to yield compression, as interest rates remain low and institutional investor demand is sustained.  The impending election could however, lead to a pause in the market as initiatives to restrain public sector borrowing are put in place.