Warehouse REIT on Tuesday said it swung to an annual loss and reported a weaker net asset value during a year of ‘equity market valuations’.

In the financial year to March 31, the London-based industrial warehouse investor said its NAV per share dropped by 28% to 124.4 pence per share from 173.9p the prior year.

Warehouse REIT’s portfolio valuation was £828.8 million, a 19% decline from £1.01 billion the previous year.

The company explained that this was caused by central bank interest rate hikes, which were enacted in a bid to contain rampant inflation.

The new funding environment and increasing yields reduced property valuations across all commercial real estate markets.

Warehouse REIT swung to a pretax loss of £182.9 million from a profit of £191.2 million the prior year. This was driven by a fair value loss of £193.4 million on investment properties, from a gain of £163.7 million gain the prior year.

Chair Neil Kirton said that the company’s ‘robust performance has been overshadowed by macro events which resulted in a step change in interest rates, driving property yields higher and impacting valuations across the sector’.

Gross property income was down 1.8% to £47.8 million from £48.7 million the prior year

Warehouse REIT maintained its annual dividend at 6.4 pence per share.

‘Based on the performance of industry benchmarks and are own experience, there are clear signs that the investment market is stabilising and investors are returning,’ said Chair Kirton.

‘However, as an industry we are highly sensitive to the future path of interest rates and the outlook remains uncertain, so the board will continue to manage the business diligently and carefully.’

Warehouse REIT was trading down 1.5% at 101.85 pence in London on Tuesday morning.

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