Strong second-half showing from U+I

Development and trading gains in the first half to August totalled £12.8m, in line with a target range of £12m-£19m. In June, it completed the sale of its mixed-use scheme in Bicester, while contracts were also exchanged on the sale of the Bryn Blaen wind farm, with sale completion expected in January 2019. However, delays in securing planning consent at the remaining Rhoscrowther wind farm meant missing the subsidy window, and gains will be a lower than previously expected level of gains of £35-£45m for 2021.

After the half-year end, U+I secured a resolution to grant planning for a joint venture mixed-use scheme in Kensington and Chelsea, while contracts have been exchanged on the sale of its Circus Street, Brighton joint venture.

At St Mark’s Square in Bromley, the retail and leisure elements have been completed, while two of the five residential blocks have also been finished, with the remaining three due for completion in January. Of the 200 units on offer, 129 have already been pre-sold. In addition, the joint venture leisure assets, which are 92 per cent pre-let, are to be marketed for sale with a value of over £39m.

The overall capital value of the portfolio fell by 2.6 per cent, reflecting the negative market sentiment towards secondary retail assets, although occupancy at its six shopping centres remained high at 98 per cent.

Included in the £50m of acquisitions targeted for the full year is a 98,000 sq ft mixed-use scheme in Bournemouth for £11.3m. Correct asset management is expected to deliver a total return of over 10 per cent, with 56 per cent of rents subject to fixed or inflation-linked uplifts.

Analysts at Peel Hunt are forecasting adjusted net asset value at the February 2019 year end of 305.3p, from 302.8p in FY2018.