Developer Langtree says it does not expect stability to return to the property market until after a general election - but says home workers are drifting back to the office.
Chairman Tim Johnston said the company successfully weathered a tough 2023 despite turbulent market conditions.
In its accounts for the year to March 2023, newly published on Companies House, Langtree Property Partners Holdings reported turnover of £4.67m - up from £2.3m in 2022. Pre-tax profits fell sharply, from £5.1m to £107,000, which the company attributed to the accountancy effects of falling property prices rather than to trading issues.
Langtree said it had almost 3m square feet of property under ownership or management with 89% average occupancy. Net asset value rose modestly, from £16.4m to £16.8m.
Development activity is ongoing at sites across the North West and Midlands, with sites under ownership and management in Yorkshire and the South West.
In his introduction to the financial results, chairman Tim Johnston said: “The last year has understandably been more challenging and yet through the hard work and ability of the Langtree team we have again achieved a very positive year overall.
“I believe that the year ahead also looks to be another challenging period, as I think it is unlikely that much stability will return to the markets as we move towards a general election sometime in 2024. As ever though, I feel that we are well placed to have another positive year with a sound business plan and solid finances.”
In a later statement, Mr Johnston said: “Given the headwinds out there, this is a very strong set of results.
“If you take valuations, for example, the industry has seen a general reported downturn of 15 per cent, but Langtree has experienced only a modest 3 per cent decrease in values overall. That’s testament to the quality of our portfolio and partnerships, as well as past sound judgement.”
And group chief executive John Downes said: “It’s been a busy and challenging year, but one we anticipated. There are many things that contribute to allowing a business like ours to continue forward, chief among them being the quality of our team, and the commitment of our partners and clients.”
The company’s ongoing projects include:
- A planning application for the 1.6m sq ft second phase of the Parkside logistics and advanced manufacturing development in St Helens.
- A further phase of the campus at Sci-Tech Daresbury. Tenders are out to build a speculative 40,000 square foot laboratory and 20,000 square foot office building.
- The development of 190,000 square feet of industrial units at Hollinwood Junction, Oldham.
- Redeveloping the 80,000 square foot St James Business Centre in Warrington into the Warrington Digital Hub.
In his report, Mr Johnston also addressed the debate over working from home.
He said: “Our own experience from assessing the portfolio that we own or manage is that there is a general drift back towards workplace-based operations.”
He added: “Our running occupancy for the year averaged 89% and supports that view.
“Whilst enquiries for space continue at our healthy company average, it is also apparent in the second half of 22/23, and continuing, that investment decisions are taking longer. This supports my comment… that uncertainties about the macro-economic position are feeding through to real estate investment decisions.”
Mr Downes said the Government’s decision to make Sci Tech Daresbury an investment zone was a big boost for the site.
He said: “Part of our goal is regeneration and job creation, and Sci-Tech Daresbury continues to deliver on both fronts. It is an excellent partnership between Langtree, UKRI and Halton Council which has so far created more than 1,000 new jobs. The campus continues to go from strength to strength, giving us every encouragement to start the next phase of development in the spring which, when completed, will mean that almost 200,000 square feet of new space will have been delivered. Design development for the next phase thereafter is already underway.”
