McKay Securities, which owns a portfolio of office and logistics assets in the South East of England, said it was “ideally placed to benefit” from a shift in the office sector caused by COVID-19.
Its office portfolio, which accounts for 56.3% of its £438.95m portfolio, is predominantly located in towns in the Home Counties that could see an uplift in occupier demand if a decentralisation from London to established centres in the South East materialises post COVID-19.
Chief executive Simon Perkins said: “There will be changes in working practices, and our portfolio is ideally placed to benefit from a shift towards both decentralisation from central London and local working.
“In the meantime, the outlook remains dominated by the speed at which the COVID-19 pandemic passes and the impact it has on the economy.”
Perkins made the comments in half-year results. The group saw the value of its portfolio fall 3.4% during the six months to the end of September.
This resulted in a 4.9% drop in EPRA net tangible assets (NTA) to 313p per share (March 2020: 329p).
It declared a dividend of 2.8p, in line with the same period last year.
Operational highlights
During the period it sold its largest asset, 30 Lombard Street, in the City of London, netting £70.1m proceeds after costs.
It also let a 135,000 sq ft logistics development in Theale to Amazon.
The City of London sale has “transformed” its balance sheet. Its loan to value (LTV) reduced to 30.3% and it has £108m of undrawn facilities for new acquisitions and other opportunities.
It also recycled £10m into the acquisition of Willoughby Logistics Park in Bracknell, at a 5.6% yield.
Perkins added: “”We have achieved two significant milestones for the business during the period. Completion of the sale of our largest asset, 30 Lombard Street, EC3 for a headline price of £76.50 million has transformed our balance sheet and provided us with enhanced resilience and headroom for new acquisitions and other opportunities. Additionally, the letting of 135 Theale Logistics Park, our largest development, to Amazon on excellent terms, and our acquisition of Willoughby Logistics Park, Bracknell will both contribute to our net rental income and increase our portfolio weighting in the industrial and logistics sector to 25.1%.”
MCKS : McKay Securities “ideally placed to benefit” from shift in office sector