Strong operating metrics supported by good occupational market fundamentals and active management of the portfolio. 43 per cent increase in new annualised gross rent commitments in the half year to £21.5 million.
Adjusted EPS up 6.5 per cent to 9.8 pence (H1 2015: 9.2 pence), underpinned by a 4.1 per cent increase in like-for-like net rental income, a continued low vacancy rate at 4.8 per cent and strong income from development completions. IFRS EPS of 25.9 pence (H1 2015: 44.4 pence), which includes the impact of unrealised capital gains on the portfolio, was lower due mainly to stable property investment yields on our investment portfolio.
EPRA NAV per share up 2.6 per cent to 475 pence, driven by a 1.9 per cent increase in the value of the portfolio, due primarily to development gains and active asset management.
Future earnings prospects underpinned by largely de-risked development programme with £125 million of development expenditure to complete the current pipeline (£26.5 million of new rent, 67 per cent pre-let) and advanced discussions or contracts signed subject to planning approval on a further £160 million of expenditure (£15m of new rent).
Interim dividend increased by 4.0 per cent to 5.2 pence (2015 interim dividend: 5.0 pence).
Commenting on the results, David Sleath, Chief Executive, said:
"Our strong first half operating performance reflects the continuing occupier demand for modern, well located urban and big box warehouses which appeared to be largely unaffected by pre-referendum uncertainty. Active asset management, combined with tight demand-supply dynamics, has driven healthy like-for-like net rental income growth.
"While it is too early to assess the full effects of the EU referendum result on our business, we remain optimistic about the outlook for our occupational markets given the underlying structural drivers for, and the limited supply of, well located, modern warehouse buildings. These drivers are clearly reflected in the strong first half leasing activity, which has allowed us to start the third quarter with record low vacancy and a pipeline of over 440,000 sq m of new warehouse space under construction or due to commence shortly, over two-thirds of which is pre-let, and which will be reflected in rental income by the first half of 2017 at the latest. The relatively short construction timescales in our sector means that we are able to add further accretive pre-let and speculative development exposure in the months ahead, should the occupational demand outlook remain supportive."
