UPDATE: First Property Sees Earnings Growth As It Eyes UK Buys

9th Jun 2010 12:37

(Adds executive comment) By Rachael Gormley Of DOW JONES NEWSWIRES LONDON (Dow Jones)--U.K. property fund manager First Property Group PLC (FPO.LN) said Wednesday its earnings are set to grow again in its fiscal 2011 as it invests its new U.K. commercial property fund in retail properties. "We see the fiscal 2011 as a year of increasing assets under management with our U.K. fund," Chief Executive Ben Habib told Dow Jones Newswires, adding that he expects the U.K. property market to remain stable, as opposed to valuations reducing. The company, which currently has around 85% of its assets in Poland and 11% in the U.K., said it expects the value of assets under management to increase by GBP100 million, or 30%, over the next one to two years. Since setting up a seven-year fund to invest GBP106 million in U.K. commercial real estate in February, First Property has bought four properties on behalf of the fund with an aggregate value of GBP21 million. A further five properties with an aggregate value of GBP20 million are under offer. Habib added that the company is interested in buying assets let to discount retailers in the U.K. as it sees less risk and stable returns from such properties. First Property said it is still looking to raise more funds to invest in Poland and is in talks with several potential investors, but will most likely raise funds for Polish property buys on a deal-by-deal basis instead of raising a large pool. The company added that it isn't close to signing any agreements on such talks. First Property also Wednesday announced its fiscal 2010 results which Habib said were better than the company initially expected for what he called its "trough year." For the year to March 31, the AIM-listed company posted pretax profit of GBP2.8 million compared with GBP3.9 million in the same period a year earlier. First Property attributed the fall to low interest rates, reduced earnings from First Property Services, and no performance fees in First Property Asset Management. Revenue fell to GBP10.4 million from GBP11.2 million and assets under management fell to GBP300 million from GBP310 million. At 1122 GMT, shares were flat at 16.25 pence, while the wider AIM index was up 0.2%. -By Rachael Gormley, Dow Jones Newswires; 44-20-7842-9308; [email protected] (END) Dow Jones Newswires June 09, 2010 07:37 ET (11:37 GMT)