A fund run by property regeneration group Urban Splash has blamed Trussonomics and "cash drag" on its dip in profits.
The Urban Splash Residential Fund – Urban Splash Ƶ Residential LLP – has reported profits of £1.8m for the year ending March 2023, down from £2.2m in the prior 12 months.
Fund manager Akeel Malik said the result is also a reflection on the rise in interest rates and other global factors that have "dominated the landscape" in the last year.
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The fund also announced an annual investor return of 7.4% while it invested £20.8m in its portfolio which rose 22% and now stands at 307 homes.
Average occupancy levels were 97% while like-for-like rental growth was 4.1% and the fund had a rent collection rate of 99%.
Mr Malik said: "Although we have seen great economic uncertainty in the Ƶ in recent months, the fact remains that people need homes to rent.
"There was a longer than anticipated timeline on new acquisitions as we waited for repricing in the market, and a number of purchases occurred post-year end.
"Despite the headwinds that have come from Trussonomics, interest rate rises, and other global factors, our Urban Splash Residential Fund has maintained its performance and continues to develop as an institutional-scale Ƶ residential portfolio.
"Our resilient income stream comes from a team committed to delivering a market-leading resident experience, with a portfolio of differentiated homes that are well positioned for the “new normal” with flexible, spacious interiors, access to outdoor spaces and strong connectivity – something occupiers are increasingly demanding across the country."
In June, BusinessLive reported that the fund had secured a deal with Barclays that could be worth up to £40m.
The fund's latest results also show a cash balance of £15.6m which has been earmarked for acquisitions.
Mr Malik added: "Our access to capital means that we can continue to invest in attractive purchasing opportunities in the next financial year.
"Ongoing equity fundraising discussions assist in our ambition to build an institutional-scale portfolio of design-led rental homes across the Ƶ, with an identified pipeline of over £1bn through Urban Splash Group companies and JVs, as well as third parties.
"We believe there is continuing institutional interest and belief in the Ƶ residential rental sector, and the quality of our assets and our team. I am also very grateful for the continued support of our investors and advisers."
