After rising steadily since the start of 2009, First Property's share price has fallen by almost 25 per cent in the past three months. This slide seems due to the weakness of the Polish zloty against the euro, but also against sterling. A 10 per cent fall in the zloty since the eurozone debt crisis erupted over the summer has adversely affected Polish tenants; they pay rents in euros so in effect this equates to a rent increase.
The company's main Polish business manages properties for institutions led by the University Superannuation Scheme. But it has direct exposure through its new Fprop Opportunities (FOP) fund and two fully-owned properties in Warsaw. To date, FOP has acquired £22.7m of property, but a lack of institutional interest means that First Property currently owns 84 per cent of the fund. The good news is that FOP contributed maiden income of £1.31m and generated £724,000 of profits, of which £609,000 was attributed to First Property.