Invista’s listed European property trust unveiled an increase in net asset value today in its maiden results.

The results painted an uncertain but healthy picture for the Western European property market, in stark contrast to the sharp correction in the UK.

Tony Smedley, head of European funds at Invista, said that while there had been a slowdown in the market, this would not lead to a steep fall in prices.

‘The slowdown is due to problems in the capital markets, not the property market,’ he said. ‘While a market this big will never be insulated from problems in the capital markets, we do not expect to see a knee-jerk reaction like in the UK. There is no real evidence of prices falling much to date.

He added that yields on the continent are still considerably higher than the cost of debt, and that occupier demand in the company’s core markets of France and Germany remained high.

The company revealed a net asset value of €3.11 in its results to 30 September, up 1.4% since 30 June. Its €736m (£548m) portfolio increased by 0.8% on a like-for-like basis in the three months to 30 September.

It also revealed a total return of 11.8% a share since it listed in December 2006, which it anticipates rising to 15.2% on an annualised basis, compared to the IPD Benchmark of 11%.

The company said its performance had been driven by targeting France, which had performed particularly well.

It said that it was unlikely to be able to cover its dividend with net cash income by the end of September 2008, as it had hoped when listing, due to an increase in the cost of debt, which had risen due to the credit crunch.

It also said that it had hoped to have already completed the refinancing of its debt, which matures at the end of September, but was confident that its relationship with its banker, HBOS, which holds a 55% stake in parent company Invista, would mean that it would not be an issue.

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