Hansteen continues investment push as profits slide

Property investor Hansteen said it still has plenty of firepower for further acquisitions as it reported a sharp drop in annual pre-tax profit.

In results for the 12 months ended 31 December 2011, under IFRS, Hansteen showed a £8.9m pre-tax profit compared to £33.2m in 2010 after a fall in the value of the group's property in the Netherlands and Belgium of £19.3m.

Diluted EPRA NAV per share slipped to 82p from 84p the year before.

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The group, which has bought £176m worth of properties sold £33m properties, said

normalised profit rose to £34.2m during the year from £26.5m before. Diluted EPRA earnings per share rose to 4.9p in 2011, compared to 3.8p a year earlier. Rent roll, including HPUT, rose 19.6% to £79.3m.

The group's portfolio has a rent roll of £79.3m per annum, and a yield of 8.3% from 2500 tenants.

Overall vacancy rate is 20% however in the UK vacancy is at 38%, Germany stands at 13% while the Netherlands, Belgium and France have a 27% vacancy rate.

Commenting on the property market chairman James Hambro said, "The investment market for property is cyclical but the timing and depth of the cycles are unpredictable. Our current working assumption is that the sector could be in the doldrums for the period from 2008 to 2013, then in a slow recovery phase between 2013 and 2018, and eventually reaching new highs between 2018 and 2023."

"We believe that our business model, which aims to generate high realised income profit irrespective of movements in market rents and yields, is the ideal one for this environment," he added.

Hansteen, which bought up the entire property assets of Merseyside-based commercial property specialist Spencer Group in December, said the likelihood is that the next five or six years will be a period for acquiring and intensively managing.

Hansteen, which raised £150m in 2011 to buy potential bargains, said, "Whilst there will be selective sales there are unlikely to be large scale realisations. Most likely, the bulk of the returns to our shareholders will be from a growing income and dividends. Later in the cycle capital returns will become more significant."

The board has increased the interim dividend paid on 24 November 2011 by 14.3% to 1.6p per share. The total dividend for the year ending will be 4p per share, up from 3.5p in 2010.

cj