Sentiment has dropped in the property development market but that is not dampening optimism at investment fund Develop North plc, bosses say.
The London Stock Exchange-listed fund, which is managed by Newcastle-based Tier One Capital, saw revenue and profits grow in the year to the end of November. Revenue at the fund reached £1.93m in the period, up from £1.72m, while pre-tax profits climbed to £1.17m from £261,000 a year earlier. At the same time, net asset value total was boosted to 6.3%, up from 1.4%.
Develop North lends sums of between £500,000 and £5m to projects in the North of England and Scotland, with most of its investments focussed in its native North East. Last year it put £9.2m into seven projects including commercial and residential schemes in Northumberland and a roadside retail project in Sunderland.
READ MORE: {}
During the year five investments were repaid and there were seven partial redemptions worth £6.9m. It means the fund has 23 exits since its launch in 2017. The fund's portfolio is now worth £21.1m, up £1.6m on 2023, with average loan to value moving from 65% to near 70%.
Bosses warned that incoming costs stemming from Autumn Budget measures would likely hit the building sector, but said that devolution and efforts to reform the planning system, including proposals for mandatory housing targets across local authorities, could counterbalance the effects.
John Newlands, chairman of Develop North, said: "The year under report has proved a successful one for Develop North, despite a testing economic background, with key achievements including an increase in net asset value per share and a rock solid stream of valuable quarterly dividends being paid out. Although sentiment has dipped following the Autumn budget, and businesses clearly face additional costs, we continue to have a positive outlook for 2025. This view is underpinned by stable inflation forecasts, improving house prices and government plans to encourage more ambitious housing planning and construction across the 海角视频.
"Our core region, the North East of England, is particularly well positioned for growth, which is positive for the the long-term benefit of Develop North and its shareholders. New projects have been, and will continue to be, agreed at very satisfactory rates of interest, with the potential to create not just high-income streams but to permit incremental improvements in the net asset value per share over the medium to longer term.”
Recent Develop North projects have included a £2.2m, 30-month facility to fund the construction of a new warehouse in Darlington, a £1.1m and a 24-month facility to refurbish a hotel and wedding venue in North Yorkshire.
Most Read
Brendan O’Grady, fund manager at Tier One, the investment adviser to Develop North, added: "Devolution and a changing investment and development landscape have created real opportunities for a trusted local fund with a focus on the North East and a real depth of knowledge of the local market place. The Tier One Fund Management team is now looking to capture exciting growth opportunities in the next stage of our development, as we explore investment opportunities and develop potential new partnerships."
Since its inception, Develop North has invested almost £100m in funding 40 projects across the North of England and Scotland and is said to have helped create more than 3,200 jobs with a gross development value of almost £250m.