Brixton’s shares jumped 3% this morning after it revealed it was performing strongly on the operational side of its business.
The industrial REIT’s shares were trading at 140.5p at 10.30am after it said it had increased its annualised rental income by £3.4m so for this year and reduced the vacancy rate of its portfolio by 0.5% to 18.2%.
‘Much has changed in the financial world and in respect of the economic outlook since mid-September but certain key aspects of the Brixton business model continue to perform well,’ the company said in its interim management statement.
‘Well funded businesses operating in distinct niche markets with focused and experienced management should still outperform.’
The annualised loss of rent relating to tenants in insolvency totals £1.9m, compared with a total annual rent roll of £104m.
Based on the 15.5% depreciation of its portfolio between June 2007 and June 2008, Brixton said its worst-case peak-to-trough fall in portfolio value was around 40%.
‘Further caution over balance sheet valuations is needed but it is unlikely, in our view, that transactional pricing will decline to the levels implied by the current stock prices of many of the UK REITs,’ it said.