Property group warns of Brexit caution

Rupert Mucklow

Black country property group A&J Mucklow is warning of ‘signs of caution’ from occupiers over Brexit uncertainty.

The listed Halesowen-based firm was updating the markets on the last four-and-a-half months of trading, in which it said its vacancy rate has been maintained at our record low level of 2.8%, while property yields and values appear to have stabilised and investor demand for modern regional properties remains strong.

However, the company said it is starting to see signs of caution from some occupiers due to uncertainty over Brexit negotiations.

Chairman Rupert Mucklow, said: “Although we do not anticipate any significant change in our occupancy level, or a decline in rental income over the next six months, we expect the letting of our remaining vacant properties to become more challenging, with occupational decisions taking longer.

“There is still a shortage of good quality industrial space in the Midlands. The majority of our properties are considered to be modern and in prime locations. Despite occupier caution, we believe that the prospects for further rental and capital growth remain positive in the medium term. For as long as it remains difficult to acquire modern industrial properties at acceptable prices, we will continue our current strategy of prudently growing our rental income and property portfolio through development.”

Th company recently obtained detailed planning consent and appointed a contractor for the first phase at Mucklow Park, Tyseley, Birmingham, which will comprise eight industrial/warehouse units totalling 135,000 sq ft. Approximately 45% of the space has been pre-let, with completion of the development anticipated in October 2019.

Mucklow added: “We are currently in a transitional period, at the later stage of the property cycle, which could continue in the same positive manner for some time. However, should the property market weaken, we are well positioned to capitalise on any investment or development opportunities that may arise. Our balance sheet is in good health, with total net borrowings at 31 October 2018 of £73.7m, against a property investment portfolio valued on 30 June 2018 at £433.5m.”

Last week, the company’s board announced some changes at executive director level, as part of the succession planning for the business.

Justin Parker, managing director, will step down from the board and leave the company on December 31.

The business intends to recruit a CEO who will combine both of our executive roles and bring new skills and opportunities to the business.

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