The shares of Hansteen Holdings (LSE: HSTN), the real-estate investment trust with a £1.5bn property portfolio, stayed flat at 111p in early trade after the publication of its 2013 final results, which were broadly in line with what analysts expected.
The firm reported sales of £160m with a total profit of £10m, which will release capital for reinvestment.
A number of significant property acquisitions were made in 2013, worth £91m, along a contrarian strategy of buying unpopular estates for low value.
Most recently the firm bought 17 industrial estates across England and Wales for £42m. These properties will be brought into Hansteen’s second UK industrial property fund, established in May last year, which has a capacity to invest up to £200m.
So far the fund, of which Hansteen has a 33% stake, has invested £76m making a return of 15%.
The joint chief executives, Ian Watson and Morgan Jones, commented:
“The second half of 2013 saw the investment and funding markets change significantly for the better, following five years of decline and poor liquidity. This is particularly true in the UK with growing signs that the investment market in Germany will follow a similar path, in time.”
“Having focused on buying properties with vacancies the combination of our successful asset management and the improving markets means that despite showing value growth in 2013 the yield of our portfolio was higher in December 2013 than it was in December 2012.”
“Furthermore, although we have materially improved occupancy levels there is still a significant vacant element with the potential to add both income and value. Accordingly, we are well positioned to benefit from improving market backdrop and expect 2014 to be a very active and successful one for Hansteen.”
Earnings per share increased 28% to 6.2p while the full year dividend increased 7% to 4.8p per share.
The shares currently trade at 18 times forecast earnings for 2014 and offer a projected income of 4.4%.
Of course, the decision to ‘buy’ remains up to you.
