Nottingham and North Wales developer Conygar has posted a £31m loss after its net asset value fell by a quarter.
The AIM-listed developer’s NAV decreased in the year to the end of September by £29.5m to £95m. This was primarily due to a £21.5m writedown in the carrying value of the group’s undeveloped sites in Nottingham, alongside a £5.2m write down for its Anglesey development site.
Chief executive Robert Ware said he was “acutely aware” of the impact of economic and political uncertainty on the real estate sector, adding that the results were “reflective of the currently subdued market”.
Very little of Conygar’s portfolio is rent-producing. The REIT has sold the vast majority of its investment properties to recycle capital into the Island Quarter development in Nottingham, of which relatively little is completed. This year it earned just £141,000 in rent.
Development costs were £35.7m for the year. This resulted in a loss before tax for the year of £31.2m.
But Ware argued that the outlook was good, as Conygar was continuing to invest in thriving markets, including life sciences and student housing.
Construction is under way and on budget for its 693-bed student accommodation development at the Island Quarter, which is set to complete in May 2024.
It has also secured detailed planning for a 249,000 sq ft bioscience building at the Island Quarter.
A revised masterplan for the scheme has also been agreed with Nottingham City Council which potentially increases the size of the development to 3.5m sq ft.
Ware said: “Fundamentals for the private built student accommodation, build to rent and life science sectors, remain strong, with supply shortages likely to support improved future pricing. The value from our development projects will be created over the medium-term. Given the progress made, in particular at the Island Quarter, since its acquisition, we remain optimistic about the group’s future prospects.”
The group has a £47.5m Barclays debt facility that will enable it to complete the Nottingham PBSA development without the need for any further equity input.
Last week, Conygar signed a two-year, £12m facility with ASK Partners, to take forward its Nottingham plans, as well as to fund a planning application for a 14.7 acre site in Bristol, over which it has an option.
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