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Categorized | Property

Property group Helical bucks trend with positive results

Posted on November 24, 2016

Helical, the commercial property company whose share price has been hardest hit in the sector since the Brexit vote, surprised the market on Thursday with positive first-half results.

Unlike larger peers, which have suffered declines in the value of their assets after the EU referendum, Helical said its net asset value per share had risen by 3 per cent in the first half. This was boosted by the group’s London office portfolio, where valuations were up 5.3 per cent.

Shares in Helical rose 11 per cent on Thursday morning, making it the best performer in the FTSE All-Share index and reversing part of the 35 per cent drop since the June EU vote. 

Gerald Kaye, chief executive, acknowledged “a background of some uncertainty in the UK real estate market and widespread debate as to whether the ‘property cycle’ has peaked or is merely pausing”. 

But he added: “I am confident that we will continue to attract occupiers.”

Helical, which has a market capitalisation of £310m, announced that it had pre-let 59,000 square feet at its The Bower development in the Old Street area of London to WeWork, the fast-expanding co-working provider.

Analysts had listed Helical as one of the property companies at risk from any drop in demand for London offices, with London accounting for almost half of its portfolio. The fear is that businesses may halt expansion plans or relocate staff elsewhere as the UK’s status in Europe changes. 

But Helical said it had increased its net rental income by 18 per cent from a year ago to £24.6m in the six months to the end of September. 

Pre-tax profits stood at £31.1m, down from £85.9m a year earlier as a result of losses on development projects. 

Larger peers such as British Land, Land Securities and Great Portland Estates — another London-focused property developer — have all reported declines in their net asset values since the EU referendum.