Mailbox REIT PLC, which owns the Mailbox, a prime regional office-led, mixed-use asset in Birmingham, has reported postive first-half results, which show the Mailbox's valuation had increased by 3.48% to £192.30mln as of June 2022.
The company said the increase in valuation for the Mailbox reflected the gradual easing of lockdown measures, the conversion of Level 1 retail space to office and the positive leasing momentum in retail and food & beverage units. As a result, the valuation shows a net equivalent yield of 6.25% versus 6.22% as of December 31, 2021.
Mailbox REIT also posted 20.06% growth in half-year operating profit to £3.89mln (June 30, 2021: £3.24mln), with a profit before tax of £1.25mln, up from £0.32mln a year earlier.
In the results statement, Stephen Barter, non-executive chairman of Mailbox REIT, commented: "Mailbox REIT has had a positive first half, with a further valuation increase underpinned by continued strong rent collection and positive leasing momentum. The opening of new flexible workspace at Mailbox operated by IWG's Spaces brand is off to an excellent start and is a strong endorsement of our strategy to convert surplus retail space in the property.
"Our ESG strategy is also well underway, with tangible results already being achieved on reducing energy consumption, and we continue to prioritise improving Mailbox's environmental credentials as effectively and as quickly as possible."
Barter added: "The Birmingham office market has seen a steady first half of 2022. Office vacancy remains below the five-year average, with the vacancy rate for new build space also falling back, as the flight to quality trend points to continued demand for good quality space with strong ESG credentials.
"However, the Board is acutely aware of the significant headwinds facing the economy, not least higher inflation, energy costs and interest rates. We are carefully monitoring the likely impacts for The Mailbox and our appropriate management responses".
Looking at other half-year numbers, Mailbox REIT saw £6.04mln in rent and other income (before service charges) recognised during the period (June 30, 2021: £5.40mln), while its net asset value (NAV) of £84.24mln or 99.28p per share (December 31, 2021: £85.95mln and 101.30p).
The group said its £108.50mln loan facility with Deutsche Bank reflects a loan-to-value ratio of 56.42% based on the market valuation (December 31, 2021: 58.39%), with an initial maturity date of January 20, 2023, and options to extend for two further years.
The company said Mailbox had 39 tenants as of June 30, 2022, unchanged from end-June 2021, with office and car park tenants representing 66.98% (June 30, 2021: 68.79%) of the gross rent receivable and the balance comprising retail and leisure operators with a weighted average unexpired lease term (WAULT) of 13 years, 4 month to break (June 30, 2021: 13 years, 9 months to break).
Total dividends of 3.49p (June 30, 2021: 0.92p, relating to the period May 14, 2021, to June 30, 2021) have been declared for the half year, with total cumulative dividends for the half year equating to 7.0p (on issue price) on an annualised basis, which is consistent with the company's policy of targeting an initial annual dividend payment of 7%.