An investment fund set in motion to grow North East property projects has continued to grow its portfolio despite cost challenges within the sector.
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 £500m pot of cash to invest in regional property projects.
Investors from across the Ƶ put cash into the fund, which is then loaned to a range of projects.
In results published for the half-year ended May 31 2019, the trust’s advisers at Tier One Capital said that, as of the end of March, the portfolio has grown to a value of £24.9m, representing 15 projects, of which the company has a profit share agreement in seven.
The company achieved six-month income of £1.001m, an increase on £0.923m, with the loan book also growing by £0.989m over the equivalent 2018 period.
The net asset value as of May 31 was 93.39p per share, down 1.1% from 94.39 pence at 30 November 2018, giving a net asset value total return for the six month period of 2.36% when dividends are taken into account.
During the period loans of £5.6m were repaid and since the end of May a further £500,000 of loans were repaid, while further investment of £2.6m has been made.
Ian McElroy, chief executive of Tier One Capital Ltd, the investment adviser to the TOC Property Backed Lending Trust PLC said: “The company continues to provide high quality, experienced property developers in the regions with an alternative and robust source of funding, which is delivering positive returns to its investors.
“The strong focus on supporting developments in the North East demonstrates the confidence in the region, albeit we must remain vigilant to market difficulties as political uncertainty continues”.
The recent half year also saw John Newlands, the Newcastle-based former head of investment companies research at Brewin Dolphin, who was previously an investment trust analyst at Williams de Broe in the City of London, move into the role of chairman following the planned retirement of Steve Coe.
In the half-year report he said: “The company’s pipeline of potential new loans is strong and indeed growing so as it becomes more widely known and its track record becomes established this should cause both portfolio diversity to increase further and allow the very best opportunities to be taken up.”
Brendan O’Grady, fund manager at Tier One Capital Ltd, added: “We are delighted to maintain our dividend for the quarter at 1.5p per share despite the challenges facing the sector.
“Significant pipeline progression within the period also saw two new deals close-out in Quarter Three that will support both the build-out of new housing stock and the creation of construction sector jobs, both of which remain important to the development of the North East economy.”
