An investment fund which was launched to grow North East property projects said it has achieved achieved another year of encouraging growth, despite ongoing uncertainty and challenges in the current COVID-19 environment.
Newcastle-based Tier One Capital first listed the TOC Property Backed Lending Trust PLC on the stock exchange at the beginning of 2017 amid plans to create a pot of cash to invest in regional property projects.
Announcing its full year figures for the year ending 30 November 2019, the listed investment company said it achieved annual income of £2.358m, an increase from £2.148m in 2018, and it also maintained its dividend throughout the year.
The portfolio at the financial year-end, post-impairments, totals some £25.2m, spread across 17 different projects.
The firm said the results show another encouraging year for the TOC Property Backed Lending Trust PLC, as the company marks three years of trading.
Ian McElroy, chief executive of Tier One Capital Ltd, the investment adviser to the TOC Property Backed Lending Trust PLC said: “The fund continues to provide high quality, experienced property developers in the regions with an alternative and robust source of funding, providing the opportunity for longer term positive returns for investors.
“We continue to have confidence in the strength of the North East property market, and the quality of property developers we have in the region.
“That said, we are naturally mindful of the unknown challenges ahead as the country begins to emerge from lockdown and we are all aware that we are now in unchartered waters, with COVID-19 compounding what was already a challenging property market.
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“Whilst our priority at this time is ensuring our stakeholders remain safe and well, we remain confident that our robust relationship led approach with our borrowers will give the fund the best opportunity to minimise disruption to daily activities.”
Looking ahead, in addition to new projects the company funded, it is currently reviewing £19.3m of potential funding opportunities across eight projects, most of which are in the North East.
In the stock market announcement directors said that most of its construction sites, which had closed in March 2020, have now re-opened on a limited basis, adhering to social distancing rules, but that there is no certainty when sites will become fully operational again.
The stock market note added: “Given this, it may be difficult for a time to accurately value properties, and thus to assess our security value. The focus will remain on protecting shareholder value by working with the developers to ensure the best result, depending on the individual circumstances, for each development we support through our loans.”
Brendan O’Grady, fund manager at Tier One Capital Ltd, said: “Although 2019 has proved to be another positive year in the progression of the fund, especially with achieving the three-year milestone and maintaining our dividend throughout, we remain cautious about the coming months.
“Like most other investment funds that support regional property developers, we remain diligent of the challenges ahead, but excited by the opportunities that will likely present themselves.
“This has already been evidenced by the ongoing progression in the credit quality of our loan pipeline, and we look forward to continuing to support the build-out of new housing stock and the creation of construction sector jobs, both of which remain as important as ever to the development of the North East economy.”