KCR Residential REIT (KCR) announced its final results for the year ended 30 June 2023. NAV per share fell 1% over the course of the year. Revenue for the financial year increased by 23.01% (to £1.58 million up from £1.28 million in 2022) – largely underpinned by the ongoing performance of Coleherne Road and the conversion of Deanery Court to a WIWO operating model.
The company also highlighted that portfolio level occupancy has remained close to 100% of all available flats let on a traditional assured shorthold tenancy (AST) basis. Rental increases continue to be achieved at renewals / re-lettings.
Commenting on the results and the company’s outlook, Chariman James Thornton added:
“This year has seen continued growth of the business in an environment that has remained uncertain. Increasing interest rates, cost of living pressure and supply chain disruption have presented ongoing challenges for the business. Inflationary pressures across most aspects of the economy have resulted in ongoing cost increases which has made the focus on reducing costs difficult.
“During the financial year, and as reported at the half year, we have been continuing with the transition of the business. As outlined in both last year’s Annual Report and the Interim Report for this financial year, the strategy remains to:
• improve the rental revenue from the existing properties;
• upgrade the overall portfolio quality;
• explore the development opportunity within the portfolio; and
• focus on reducing costs.
“Revenue growth for the 2023 financial year has been driven by the work completed to date on modernising and improving the standard of the property portfolio. As works have been completed and the apartments let up, enhanced rental levels have been achieved.
Regarding the outlook, he added:
“From a macro-economic perspective, higher interest rates and cost of living pressures are expected to present ongoing challenges for the Group. Strong growth in Group rental levels has been achieved over the last 2 financial years and is expected to continue over the 2024 financial year. Following completion of the conversion of Deanery Court to the Cristal Apartments WIWO operating model, refurbishment works at Coleherne Road and the recently acquired Heathside apartment, no major works are planned for the current financial year outside of the retirement portfolio.”
KCR: KCR remains stable despite rising cost pressures