After sales of £295m in 2018 more than offsetting £57m of acquisitions, commercial property landlord Hansteen (HSTN) has switched the emphasis away from crystallising gains on mature assets, towards managing the smaller portfolio for income and value growth. While further acquisitions will be made where the terms are attractive, Hansteen will no longer be a significant seller until there is a clearer view on the current property cycle.
The level of net disposals inevitably had an impact on net asset value (NAV) and rental income, while headline profits were also affected by a smaller valuation uplift. Even so, 2018 marked the sixth successive year that Hansteen has delivered double-digit total returns as measured by adjusted NAV and dividend returns.
The portfolio is focused on smaller urban distribution and light industrial warehouses rather than big boxes, and demand in all regions continued to push rents higher. A total of 874 new leases or renewals were secured during the year at an average 10.4 per cent premium to the December 2017 estimated rental value. Further payments were also received as part of the compulsory purchase of Saltley Park to make way for the HS2 rail link. Having received £37m in March 2018, a further £19m was paid in March 2019.
Analysts at Numis are forecasting adjusted NAV at the December 2019 year-end of 107p a share, against 103p in 2018.
HANSTEEN (HSTN) | ||||
ORD PRICE: | 93.6p | MARKET VALUE: | £386m | |
TOUCH: | 93.6-93.8p | 12-MONTH HIGH: | 113p | LOW: 86p |
DIVIDEND YIELD: | 6.6% | TRADING PROPERTIES: | £10m | |
DISCOUNT TO NAV: | 9% | NET DEBT: | 41% | |
INVESTMENT PROPERTIES: | £629m |
Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2014 | 99 | 131 | 17.6 | 5 |
2015 | 105 | 171 | 21.3 | 5.25 |
2016 | 124 | 120 | 14.8 | 5.9 |
2017 | 135 | 70.3 | 9.8 | 6.1 |
2018 | 103 | 59.5 | 14.4 | 6.2 |
% change | -24 | -15 | +47 | +2 |
Ex-div: | 4 Apr | |||
Payment: | 17 May |