First Property Group expects to report interim loss

8th Nov 2023 09:48

(Sharecast News) - Property investor First Property Group said on Wednesday that it expects to report an interim loss, principally as a result of its interest in Fprop Opportunities.

First Property noted the "rapid increase" in interest rates from near zero in 2021 has "naturally" impacted property values but said it has been "shielded" from much of this by its accounting policy of holding properties at the lower of cost or value.

However, the AIM-listed group said the cost of its share in Fprop Opportunities, a fund invested in five commercial properties in Poland, was rebased in October 2018 when its share in it fell below 50%, resulting in it being de-consolidated from the firm's accounts and accounted for as an associate at the then prevailing property values.

In the six months to 30 September, the five properties owned by FOP decreased in value by £2.2m, of which the group's share amounted to £816,000. As a result, First Property expects to report an overall loss in the first six months of the current financial year.

First Property added that nearly one-third of vacant office space in Warsaw and Gdynia has now been leased, with tenant demand remaining "steady" in both cities.

As of 1145 GMT, First Property shares were down 1.60% at 17.22p.

Reporting by Iain Gilbert at Sharecast.com