Mailbox REIT declared an interim dividend of 1.75 pence per share for the third quarter as it reported continued strong rent collection and improved property valuation.
The owner of The Mailbox, a large office-led, mixed-use property in Birmingham's city centre, said 91.9% of rents for the September 2021 quarter had been collected as of 26 October.
Total collection is expected to be over 98% as the bulk of the remaining 8.1% due during the quarter is expected to be paid by tenants that typically settle their rents monthly.
An independent fair valuation of the Mailbox increased to £184mln, according to commercial estate agent Avison Young, up from £182.2mln at the end of June and £181mln in March.
This came as M7 Real Estate, the REIT’s asset manager, has been working with office rental partner IWG to convert Level 1 retail units into higher-value flexible working space. With £2.1mln already invested, it said the project is performing well against the budget with completion expected next February.
At the end of September 2021, the true equivalent yield of the Mailbox was 6.43%. The REIT’s unaudited net asset value was £86.47mln, or 101.91p per share, when accounting for the interim dividend paid in August. This compared to 102.31p per share at the end of June.
The third-quarter dividend, which remains in line with the target of over 7p per share per annum, will be paid on 26 November 2021 with an ex-dividend date of 4 November.
Chairman Stephen Barter said: "During the quarter, Mailbox REIT has continued to deliver against the objectives as set out at IPO, with another dividend declared which is in line with target, underpinned by high rent collection rates from our roster of low-risk tenants. This, along with a continued improvement in market sentiment, contributed to a small increase in the valuation of the Mailbox. Looking to the future, we have made further progress with our asset management plans and expect the conversion of the excess retail units into additional, higher value office space to complete early next year."