A&J Mucklow REIT makes satisfactory progress

WEST Midlands based Real Estate Investment Trust, A&J Mucklow has said it remains on target for a satisfactory year.

The Halesowen group said in its interim management statement today that it had continued to make steady progress and had seen an improvement in property values since December.

Rupert Mucklow, group chairman, said: ”The group has continued to make steady progress during Q3 and having now collected the final quarters’ rent for the period up to June 23 2010, remains on target for another satisfactory year.

“Retaining existing tenants and attracting new ones is still a challenge, but occupancy levels have been maintained at around 92% and in the last month, we have noticed an improvement in the number of serious enquiries for existing and pre-let business space.”    

“Property values appear to have also improved since our last valuation in December 2009, as yields have compressed further, due to a rise in Investor demand and reduction in available stock,” he added.

He said he hoped that current economic and political uncertainties did not impede the encouraging signs of recovery for industrial property.

The group has acquired one new property in the period since December 2009 – a 55,000 sq ft industrial unit in Tyseley, purchased at a cost of £3.7m. Mucklow said the unit had been built to a high specification in 2002 and was let at a current rent of £0.3m pa until 2022.

It said its 128,500 sq ft Costco warehouse development in Coventry was progressing well and remained on time and budget.

Mr Mucklow said capital expenditure incurred on these two projects totalled £6.8m during the period.

“As a consequence, borrowings (net of cash) increased to £46m at April 30 2010, whilst undrawn bank facilities amounted to £42m. Net debt to equity gearing was 27% and there are no bank loans due for refinancing before 2014, or any issues concerning banking covenants,” he said.

Mr Mucklow said the group remained committed to protecting both occupancy levels and rental income on its existing properties.

“We are also now starting to see and pursue a number of suitable investment and development opportunities, which are looking financially viable again,” he added.

The group said that other than stated today, there had been no change in its financial position since December.