The strengthening of the euro against sterling since the EU referendum has helped Hansteen to deliver a bumper set of half-year results.
Hansteen’s shares have risen 7% since the Brexit vote, making it one of only a few UK-listed propcos whose shares have benefited from the fallout.
The drop in the value of the pound has been key to its performance because it owns €1.2bn (£1bn) of property in Germany, the Netherlands, Belgium and France.
Hansteen’s EPRA net asset value (NAV) per share rose by 11.9% from 111p to 124.4p, with 7p of the increase attributable to foreign exchange.
The company also benefited from solid occupational markets and a large gap between yields and cost of debt.
“Hansteen’s portfolio has a simple yield of 7.6% and our all-in cost of borrowing is 3.2%,” said James Hambro, chairman of Hansteen. “That yield has consistently translated into one of the highest earnings among the REIT sector.”
Like-for-like rents dropped 0.5% in the first six months of the year, but expansion of the portfolio helped drive a 28.1% increase to £29.2m in normalised income profit, which excludes the impact of valuation and profits or losses from property sales. Without the impact of the fall in the pound, this would only have risen by 22%.
“While we expect growth to slow across the portfolio, we see limited downside potential, which together with the company’s income focus mean we reiterate our Buy rating,” said analysts at Stifel.
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