Circle Property PLC highlights strong rent collection as operating profit rises

() has highlighted “strong average rent collection” in its half-year results despite disruption from the coronavirus (COVID-19) pandemic.

In the six months to September 30, 2020, the regional office owner said rental receipts have been running at an average of 92.5% of rents due for the March and June quarters, while operating profits before property revaluations rose to £2.7mln from £2.4mln last year alongside a 10% rise in rental income to £3.9mln.

READ: Circle Property says rental collection remains strong

Circle Property also reported an estimated net asset value (NAV) for the period of 283p per share, up from 278p a year ago and representing a 90% increase since the company joined the AIM market in February 2016. The firm also proposed an interim dividend of 2.5p per share compared to 3.3p last year.

“Despite the recent impact of the second lockdown, which saw a further decrease in demand within the wider commercial office market, we have seen the benefits of the quality of our assets and our long-term experience in actively managing them, evidenced through our strong rental collection”, Circle chief executive John Arnold said in a statement.

Looking ahead, the CEO said the firm was of the view that while the pandemic has led to a rise in home working, in the medium term the practice will “prove to be unpopular and more unproductive, and that offices will prove their worth when there is a return to something like normality”.

“In the meantime, the recent news about the roll-out of Covid-19 vaccines is encouraging, yet it remains difficult to call when we may see a significant improvement in occupational demand”, Arnold added.

The company also said it is undertaking fit-outs of its vacant offices in Bristol, Birmingham and Maidenhead in order to respond to “shifting demand for ‘plug and play’ offices that are ready to move into”.

Circle shares rose 0.2% to 172.9p in early deals on Wednesday.