First Property has reported a 22.4% increase in annual profit before tax largely thanks to the strong profits delivered by its office-to-residential fund.
In results for the year to the end of March, the fund manager said profits increased to £8.08m and adjusted NAV jumped 44% to 35.75p. One of the main factors contributing to the profit growth was the £3.2m performance fee earned on profits realised by Fprop PDR - which has focused on office-to-residential conversions.
First Property has said no further investments will be made by Fprop PDR unless the legislation around residential conversions is extended. The firm’s UK activities are now concentrated on a new mandate won early in the year to invest £125m on behalf of the Shipbuilding Industries Pension Scheme.
The group also highlighted six properties it had bought during the year in Poland and Romania which made a contribution to profits of £2.27m.
Ben Habib, chief executive of First Property Group, said: “The financial year just ended has been transformational for the group principally because of the six investments made by it and FOP in Poland and Romania, which should yield recurring profit before unallocated overheads and tax of just over £6m per annum.
“These earnings will more than replace the fee income we used to earn from the USS fund which expires in August 2015 and which at its peak amounted to some £3m per annum.”
First Property also revealed it was in preliminary discussions with investors to start a new Polish fund targeting a 15% return on equity.
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