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(Sharecast News) - LondonMetric Property flagged a jump in net income on Monday, leaving it on track to meet full-year guidance, despite a challenging macroeconomic backdrop.
Updating on trading ahead of interim numbers, the real estate investment trust said net rental income rose by more than 8% to £240m, boosted by last year's acquisition of Urban Logistics, high occupancy and "very strong" rent review and leasing activity. The average uplift during the first half from rent reviews was 17%, while rent collection was 99.3% and occupancy was 97.4%.
As a result, LondonMetric - which specialises in consumer-facing sectors, including entertainment, leisure and retail - said it remained "firmly on track" to meet consensus for full-year earnings per share, of 13.9p, despite a "challenging economic backdrop".
The firm acknowledged a reduction in liquidity in the direct real estate market, but said it had still made a number of non-core disposals, with sales totalling £185m across 36 assets during the period. Acquisitions totalled £424m, dominated by this summer's deal with Schroder Real Estate Investment Trust to buy the Picton Property Income reit.
Valuations remained flat despite a 50-basis point increase in the five-year interest rate swap rate during the period, which LondonMetric said reflected "strong income growth and alignment to the best sectors".
Chief executive Andrew Jones said: "Property professionals are watching interest rates like trades, but despite elevated swap rates and reduced liquidity, we continued to execute disposals and reinvestments.
"While we can't predict how the macroeconomic environment will evolve, our all-weather portfolio is on the right side of changing consumer behaviour."
LondonMetric's portfolio is currently valued at £8bn.
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