Mailbox REIT PLC saw a 2.6% increase in the valuation of its primary asset, the Mailbox mixed-use property in Birmingham, in 2021.
The Mailbox was valued at £185.8mln at the end of 2021, an uplift of £4.7mln on a year earlier.
The valuation shows a net equivalent yield of 6.22% (2020: 5.90%) and reflects the progress made with the company's retail to office asset management strategy and the positive impact of the easing of lockdown measures during the period on retail and leisure tenants, the real estate investment trust (REIT) said.
The REIT’s net asset value (NAV) of £85.95mln was equivalent to 101.3p per share.
The property company recognised £10.3mln of rent (before service charge), down from £11.0mln in 2020, of which £1.3mln was related to leasing incentives (2020: £2.1 million). There was a £0.8mln reversal in the provision on tenant receivables driven by write-offs of tenant receivables relating to the prior year.
Net rental income in 2021 rose to £8.78mln from £8.63mln in 2020. Rent collection remains strong, the company added, with 97% of total contracted rents for 2021 having been received, as of mid-March 2022.
The overall vacancy by square foot improved in the final quarter of 2021, with the vacancy rate running below 5%, as 15,000 square feet of space was also leased, adding £400,000 to the rent roll (after rent-frees).
Mailbox reported a 17.7% increase in operating profit of £7.8 million before fair value changes (2020: £6.6 million) for 2021 with a profit before tax of £1.8 million (2020: loss of £22.4mln).
Earnings per share using the industry-standard (EPRA) measurement was 3.43p, which, based on dividends declared of 4.42p, reflects a dividend cover of 77.6%.
"This is a very positive first set of full-year results for Mailbox REIT as a publicly quoted company,” declared Stephen Barter, the chair of Mailbox REIT.
“This performance both underlines Mailbox's potential as a prime regional office-led, mixed-use asset and demonstrates our ability to deliver on the goals set out at IPO [initial public offering], particularly against a backdrop of a more confident economic outlook for the UK, and particularly for Birmingham and other main regional cities,” he added.
"We have also prioritised our focus on improving the Mailbox's sustainability, formalising our approach by launching our pathway to net-zero, targeting 2030 for landlord operations and 2040 for all operations. This is not only the right thing to do from a wider perspective but also has a direct impact on returns, helping negotiations with future and existing tenants and leading to an immediate improvement in energy efficiency, with over £60,000 of annualised cost savings already achieved by replacing lighting in common areas.
"With the UK beginning to return to normal after a tumultuous couple of years under the shadow of the pandemic, albeit against the background of the tragic events unfolding in ... Ukraine, I now look forward to the future with continued confidence in both the resilience and potential for growth of Mailbox REIT," Barter concluded.