CLS Holdings needs to hold onto its tenants

Like many of its peers, developer CLS Holdings (CLI) swung to a loss in 2022 due to the higher interest rate environment. However, the office landlord, which owns assets in the UK, Germany and France, also faces additional problems that its competitors do not.

First, while there is arguably little a landlord can do about a short-term portfolio valuation drop in a wider real estate market downturn, the fact that its net rental income also dipped last year is a concern. Many other real estate investment trusts (Reits) – Tritax (BBOX), Unite Group (UTG), Derwent London (DLN) and PHP Properties (PHP) – posted chunky valuation falls over the past few weeks in their results for the last calendar year, but all of them still recorded an uptick in net rental income.