LONDON (ShareCast) - (Sharecast News) - UK and central Europe-focussed property fund manager and investor First Property Group reported a statutory loss before tax of £4.41m in its preliminary results on Wednesday, swinging from a £2.49m profit before tax recorded in the prior year.
The AIM-traded firm said that at year-end on 31 March, its cash reserves stood at £4.63m, down from £7.65m a year earlier.

Net debt increased slightly to £22.99m from £22.01.

Third-party assets under management experienced a sharp decline to £222m from £400m, and total assets under management decreased to £274m from £454m over the same period.

The weighted average unexpired fund management contract term was reduced to one year and nine months as of 31 March, compared to two years and nine months at the end of the prior financial year.

"The last year has been a challenging time for investing in commercial property," said chief executive officer Ben Habib.

"The combination of higher interest rates in the US, attracting capital out of other markets - including Poland - higher interest rates generally putting pressure on values and availability of bank debt, weaker economies and a burdensome regulatory environment with the drive to net zero has resulted in reduced occupancy demand, higher capital investment requirements, reduced values and an exodus of institutional investors from the markets."

Habib said that as a result, the capital values of the company's properties had been under pressure, and leasing activity had not been as strong as hoped and expected.

"Nevertheless, we are managing the situation and once US interest rates begin to ease we would expect a recovery in the UK and Europe."

At 1303 BST, shares in First Property Group were down 6.01% at 18p.

Reporting by Josh White for Sharecast.com.

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