A listed investor has blamed its weak financial performance on the “burdensome regulatory environment” caused by the drive to net zero, among other factors.
Fund manager and investor First Property Group said it was among the main drivers behind shrinking occupier demand, higher capital investment requirements, falling values and an “exodus” of institutional investors.
First Property posted a pretax loss of £4.4m for the year ending 31 March, down from a profit of £2.5m in the previous period.
The group, which has properties in the UK and Poland, posted a 3.8% decline in the market value of its investment properties to £45.8m, and a 19.8% equivalent reduction for its associates and investments.
Ben Habib, chief executive at First Property Group, said: “The past year has been a challenging time for investing in commercial property.
“The combination of higher interest rates in the US, attracting capital out of other markets (including Poland), higher interest rates generally putting pressure on values and availability of bank debt, weaker economies and a burdensome regulatory environment with the drive to net zero has resulted in reduced occupancy demand, higher capital investment requirements, reduced values and an exodus of institutional investors from the markets.
“As a result, the capital values of our properties have been under pressure and leasing activity has not been as strong as we would have hoped and expected.
“Nevertheless, we are managing the situation and once US interest rates begin to ease we would expect a recovery in the UK and Europe.”
Image by Shutterstock
Send feedback to Pui-Guan Man
Follow Estates Gazette
