McKay Securities updates on contracts, refurbishments and tenancies

McKay Securities updates on contracts, refurbishments and tenancies

Real Estate Investment Trust company McKay Securities plc (LON: MCKS) have posted their annual results, listing a series of positive if not necessarily groundbreaking updates.

Comments from Company CEO Simon Perkins make up the bulk of the update.

“Since the year end, we have made good progress with our active programme of portfolio refurbishment and development schemes, maintaining our focus on the office, industrial and logistics sectors of London and the South East.  Completion of these schemes will enhance our ability to deliver further income growth from unlocking our significant 24.3% (£6.6 million pa) portfolio reversion,” the Company CEO stated.

He continues, “Having derisked the office development programme with lettings last year, the resulting valuation gains enabled us to increase our banking facilities by £55 million shortly after the year end.  This has provided additional headroom for acquisitions and future portfolio projects, which will also contribute to future earnings growth.”

“Market conditions remain generally as reported in our year end statement issued on the 20th May 2019. Occupational demand in the South East office sector, which accounts for 54% of our portfolio (by value), has proved resilient despite the continuing political uncertainty.  Once a Brexit conclusion is reached, stronger economic activity and limited supply, now at a 10 year low, should support rental value growth in this market sector.”

“The South East industrial and logistics sector (16% of the portfolio) has continued to benefit from rental growth, albeit at a slower pace, with limited supply also constraining occupier choice.  These remain positive market conditions for the speculative development of our distribution warehouse at Theale Logistics Park, referred to below.”

“Investment volumes in our markets are down compared to this time last year, due primarily to the extended Brexit programme.  Buyers are exercising caution in view of uncertainty over the outcome, and sales are generally on hold for the same reason.”

Other updates issued by McKay Securities include; progress on refurbishments of portfolio properties, contracts exchanged for the freehold disposal of Station Plaza for £8.23 million, four lettings with a combined rent of £0.15 million and strong tenant retention of 78%.

The Company’s shares are currently trading up 2.17% or 5p to 235p a share. Analysts from Peel Hunt reiterated their ‘Add’ stance on McKay Securities stock.

Elsewhere in property development and estate agency news, there have been updates from; MJ Gleeson PLC (LON: GLE), Somero Enterprises Inc (LON: SOM), Bovis Homes Group plc (LON:BVS) and Telford Homes plc (LON: TEF).