Arcona Property Fund posts Q1 pretax profit of €1.438 million
Arcona Property Fund reported a first-quarter 2017 profit before tax of €1.438 million. Adjusted for valuation gains and one-off costs, the pretax profit for the January-March quarter was €424,000. Gross rental income rose to €1.976 million for the period.
“We are delighted with these results, especially as during the quarter we finalised the acquisition of the 11 shopping-centre Polish portfolio, which will lead to further improvements in the Fund´s operational ratios going forward,” said Guy Barker, managing director of Arcona Capital, an independent manager of property funds and asset manager of entrusted assets / properties in the markets of Central Europe. “Our focus now is on securing further growth opportunities for the Fund, whose total asset value we are looking to grow to €500 million over the next three to five years.”
The full impact of the €25.9 million acquisition of a portfolio of 11 shopping centres in Poland only shows up in the results of the Fund from March 2017. The initial 8 properties were acquired in mid-December 2016 and the final three in March 2017, resulting in a valuation gain of €1.217 million. One-off costs related to the acquisition and the temporary VAT funding loan in Poland amounted to €203,000.
The Czech and Slovak portfolios demonstrated continuing income growth, with net income in the first quarter rising to €779,000 from €742,000 in the year-earlier period, an increase of 5%. Occupancy levels in the Czech portfolio rose from 86.7% at end-2016 to 95.6% at end-March, and in Slovakia from 73.5% at end-2016 to 74.4% at end-March.
Occupancy across the whole of the Fund’s portfolio was 84.1% at the end of the first quarter, up from 80.7% at the end of 2016. The Fund’s Loan-to-Value ratio rose from 49.3% at end-2016 to 56.7% at the end of the quarter.
The Fund also reported the completion of the sale of part of the VUP building in Brno, first announced on 6 April 2016. The sale price of €200,000 was in line with the 2016 year-end valuation.