Max Property turns defensive

That was the only acquisition in the half, and only the second of the calendar year. The other, a sale and lease back deal on 29 pubs with Enterprise Inns, was also in London. Max is wary of the drift in regional property valuations and has made a point of avoiding retail. "Many shopping centres and high streets have, in our view, a rising embedded vacancy rate that is yet to be adequately reflected in market pricing," notes chairman Aubrey Adams.

Reported profits fell as a result of this valuation drift - but that was offset by £13.8m of net rental income, so adjusted net asset value (NAV) rose 1.8 per cent to 132p. Mindful that this is underwhelming by past standards - NAV is up 38 per cent overall since listing in May 2009 - management emphasises that Max is a seven-year total return play facing a "corrugated" recovery.

Max's business model is to buy under-occupied assets cheaply and then find new tenants. That's not easy just now, but management's record of driving void rates down remains impressive. In August, it let a 30,000 square-foot building in Manchester to Shell which, with other deals, reduced vacancy on the regional office portfolio from 39 per cent in June to 32 per cent by the end of October. The vacancy rate on the industrial portfolio also fell slightly in the period, to 15 per cent by area, but its value was still marked down - demonstrating that secondary property owners must run just to stand still.

Broker Peel Hunt expects full-year adjusted NAV of 137p.