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London & Scottish says valuation and rent hold up

Stephen Inglis: ‘strong pipeline’

Glasgow-based London & Scottish Property Investment Management says valuation and rent collection have held up well against the sector average.

Its portfolio was valued on 30 June at £742.3 million. Adjusting for property disposals earlier in the year, the like-for-like valuation was only 3.7% lower than on 31 December 2019. In the same period, UK commercial property capital values fell by 6.9%.

Rent collection also remains strong, with Q1 collection now standing at 98% (96% has already been paid and agreed plans are in place for the remaining 2%). Rent collection for Q2 has increased steadily and now stands at 93% (with 84% already paid, 4% on monthly collection and 5% on agreed payment plans).

In recent weeks, the company has also signed six lease agreements providing total headline rent in excess of £1.1 million.

Stephen Inglis, CEO of London & Scottish said: “Our highly diversified portfolio of 151 properties continues to demonstrate its resilience.

“Furthermore, our strong pipeline of new lease agreements indicates that demand for core office and industrial properties is currently outstripping supply.

“We are also seeing evidence of major organisations moving to a hub-and-spoke model, with a large city centre presence supported by smaller regional offices. We expect this trend to increase demand for regional office space.

“Despite this, at a sector level, property portfolio valuations are still adjusted down. In the office and industrial sectors, we believe this to be based on sentiment rather than transactional evidence.

“Therefore, having maintained sector-leading income performance though a difficult Q1 and Q2, we are increasingly confident that valuations will improve in the longer term as we return to a more normal investment environment.”

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The student housing division recently sold its first two luxury student property developments in Sheffield and Leeds for £90m.

LSPIM developed the properties which currently provide homes for over 700 students, on behalf of a US-based private investor.

The properties were marketed by Knight Frank and were bought by an unnamed far eastern investor.

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