PAUL Bassi’s Real Estate Investors has posted a pre-tax loss for 2010 amid fears of “a renewed recession”.
In its preliminary results for the year ended December 31, 2010, the Birmingham-based property investment company has seen a pre-tax loss of £5.6m compared to profit of £4.3m in 2009.
It has also seen a loss on revaluation of investment properties of 7.5%, or £4.1m, compared with a 2009 gain of £2.7m.
Contracted rental income among REI’s properties was £4m for 2010, a climb of 20%, while rental income was up slightly from £3.2m to £3.3m.
Gross property assets were valued at £56.5m, up from £54.8m, and investment property assets climbed by 5% from £48m to £50.5m.
REI, which is AIM-listed, has cash at bank of £11.8m, up from £10.8m year-on-year, and net assets of £32.3m, up 18% from £27.3m.
In his chairman’s statement, John Crabtree said: “Despite varying degrees of optimism…..the last quarter of 2010 and the early part of 2011 have raised further concerns of a renewed recession.
“While London investment property values are buoyant, driven largely by institutional and overseas capital, the UK property sector as a whole is not exempt from the economic backdrop.
“Our purchases…..together with rising rental values, will provide the potential for significant capital gains and surplus cash flow in the short to medium term.
“The lack of transactions in the Midlands has limited comparable evidence available to valuers and has contributed to our portfolio being revalued downwards by 7.5%.
“Our 2010 loss is dominated by the revaluation and interest rate swap cost.”
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