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29 Mar 2019 | 09:00

KCR Residential REIT losses widen as Brexit uncertainty limits house price growth

KCR Residential REIT reported wider first-half losses on lower margins as Brexit uncertainty and tighter regulation on mortgage lending weighed on house price growth. For the half year, pre-tax losses widened to £1.58m from £1.30m a year earlier and revenue increased 89% to £0.27m.

The uptick in revenue was driven by an increase in rental revenue across the portfolio bolstered revenues, though this was offset by subdued house price growth. The portfolio as at 31 December 2018 was valued at £26.4m, an increase of £15.1m compared to a year earlier. 'As the UK's planned exit from the EU looms, London's housing market has plateaued overall and has, in some areas, fallen in particular for larger properties located in the so called Prime Central London areas),' the company said.

Beyond Brexit uncertainty, 'House price growth is being limited by tighter regulation on mortgage lending and the possibility of rising interest rates,' it added.

'The Board remains positive regarding KCR's strategy of investing in low- to mid-price blocks of flats for rental. The market supply and demand fundamentals are strong,' KCR Residential said.

'Short-term political uncertainty and the reluctance of equity investors to fund the majority of companies through the stock market is challenging for the growth of KCR, which relies on raising equity and debt capital to grow its portfolio and rental income.'

'The Board is looking at a number of ways to increase the size of its portfolio, including through corporate activity with other companies or property funds, with the aim of delivering a larger portfolio with higher revenues and proportionately lower Company operating costs. ' At 9:00am: (LON:KCR) KCR Residential Reit PLC share price was 0p at 52p

Story provided by StockMarketWire.com
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