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Circle Property expects regional demand for high-quality office space to continue

"This has been another successful year in which the group has achieved a 25% uplift in NAV, significant lettings successes across recently completed developments leading to a 21.49% increase in contracted rent and a strong performance across our key metrics," said the CEO, John Arnold.
Office space
Circle has a policy of buying well-located regional office stock

Commercial properties specialist Circle Property PLC (LON:CRC) hailed another successful year, with its net asset value (NAV) per share rising 25%.

The NAV per share at the end of March – the end of Circle's fiscal year – was 230p, up from 183p 12 mont's earlier.

READ: Circle Property signs 15-year lease with BE Offices for its Somerset House redevelopment in Birmingham

There was a 22.6% increase over the year in the valuation of the group's portfolio of 17 UK investment properties to £114.1mln from £93.0mln at the end of March 2017.

Annual contracted rental income rose 21.5% to £6.83mln, driven by asset management initiatives. A further £795,729 has been added to annual rent roll as a result of a letting for the entire office space at Somerset House in Birmingham following the year-end, Circle revealed.

The ongoing strong demand for regional office space is reflected in the high occupancy across the company's portfolio at 99%, excluding recently refurbished buildings.

Profit before tax rose to £13.99mln from £9.97mln the previous year.

The board has proposed a final dividend per share of 3p to bring the annual dividend to 5.6p, up 12% from the previous year's 5p.

"Since the IPO of the business two years ago, Circle has consistently delivered strong income and dividend returns for shareholders, as well as a 54% increase in NAV,” said John Arnold, the chief executive of Circle Property.

"Continued growth in shareholder returns is underpinned by our consistent strategy of investing in well located regional office assets and actively managing the portfolio to grow income and maximise returns. Furthermore, we see no sign of the trend of diminishing office supply in regional cities across the UK abating, as Permitted Development Rights continue to enable the conversion of office stock to residential. As a result, we expect the demand for high-quality office space in the regions to remain robust. Looking ahead, we continue to explore opportunities to grow the company," Arnold said.


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June 20 2019
“We believe that our NAV forecasts are conservative and the shares are significantly under-valued given the company’s track record and growth prospects.”

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