Mirland Development swings to annual loss on Russia geopolitical sanctions

18th Mar 2015 09:39

Property investor MirLand Development Corporation swung to an annual loss as geopolitical tensions in Russia and the sanctions imposed on the country hit its property portfolio.The London-listed company swung from a $3.3m (£2.2m) profit in 2013 to a $71.3m loss last year, as a result of booking a negative fair value adjustment of investment properties of approximately $185.8m.MirLand attributed that to a 1.5% increase to discount rates and to a 1% hike to CAP rates - the ratio of net operating income to property asset value - in the real estate market, adding it was hit by net foreign exchange losses worth $175.9m."The combined effects of a major devaluation in the Rouble, economic sanctions, further reductions to oil prices, low growth and high inflation have damaged both the real estate sector and the business environment as a whole," said chairman Nigel Wright.The group added that its share of investment properties rose 3.35% to $37.3m as revenue from properties rose 18.2% to $56.5m.MirLand shares were untraded on Wednesday.