Midlands property developer and investor A&J Mucklow Group is leading the way for UK real estate, according to a survey by accountancy and business advisory firm BDO LLP.
The inaugural BDO UK-REIT Survey, which analysed the performance of 20 UK real estate investments trusts (REITs), based on their results for accounting periods ending in the year to 31 March 2012, has seen A&J Mucklow ranked the overall number one UK-REIT.
A&J Mucklow, which is celebrating its 80th anniversary next year, focuses on the long term ownership and development of industrial and commercial property.
During the year under review it achieved a 7.8% improvement in underlying pre-tax profit, 21% increase in gross annual rent roll and a reduction in vacant space (to 7.3%). A&J Mucklow also increased distributions paid to 18.21p per share, representing a 6.1% dividend yield.
On the whole, the UK-REIT sector has managed to successfully navigate a route through the market turmoil of the past five years and enhanced the reputation of UK-REITs as a suitable destination for both UK and overseas investors.
The BDO survey also found that four of the top five leading performers have a narrow geographic focus whilst seven out of the top ten UK-REITs have a sector or geographic focus. There does not however appear to be any correlation between a UK-REIT’s size and its performance.
Gary Rouse, Real Estate Tax Director at BDO in Birmingham, said: “Despite challenging real estate markets and the backdrop of uncertain economic conditions, the majority of UK-REITs continue to perform well – A&J Mucklow in particular. Investors generally view real estate as a safe, slow growth asset class with the potential to offer regular, predictable returns, which is attractive in such uncertain economic times.
“In addition, given the reforms introduced by this year’s Finance Act, it is only a matter of time until the sector increases in size. Moreover, we expect to see the new entrants to the UK-REIT regime becoming increasingly influential in setting the tone for UK real estate investment and, certainly in relation to residential property, delivering Government policy.”
Justin Parker, Managing Director at A&J Mucklow, said: “It was another progressive year for the Group. Whilst continuing to maintain a high occupancy level, we took advantage of the continued economic uncertainty and weak investment market to expand our property portfolio.
