Shares in industrial REIT Brixton fell 5% to 235p this morning as the company revealed a poor set of half-year results.

The company, which focuses on the West London and Heathrow industrial markets, revealed an 18% first half drop in net asset value to 448p a share. This was below analysts’ forecasts.

A 14% increase in rental income to £39m was more than erased by a 10% fall in the value of the company’s portfolio to £2.2bn.

The Investment Property Databank UK Quarterly Industrial index fell 8.2% in the same period.

The company’s net initial yield moved out from 3.9% to 4.3% and the equivalent yield moved from 5.4% to 5.9%.

Indices behind the times

Brixton also saw void rates increase from 15.4% to 18.7% over the six months, and said it had changed its estimate of how long it would take to let its development programme to 2010.

Chief executive Tim Wheeler gave a pessimistic outlook for the market. ‘Sentiment has now begun to reflect our views although many in the direct markets had been in denial over the likely impact of the financial turmoil being experienced in the developed world,’ he said.

‘There remains a state of considerable uncertainty, and this is evident in the apparent reluctance of the various property indices to react to the reality of much lower achievable values.’

Merrill Lynch analyst Kristian Bandy said: ‘This is a poorer than expected result for Brixton, whose portfolio has underperformed IPD. Vacancy has increased substantially, and management notes a worsened sentiment and market fundamentals in the second quarter, commenting this will likely affect portfolio activity going forward.’