Circle Property PLC (LON:CRC) raised its dividend by 23% for the year just ended and said it was cautiously confident about the outlook for the business.
The AIM-listed group’s portfolio is heavily focused on regional offices and it said most business owners and tenants it speaks to believe a return to work for a significant part of the working week is desirable, although flexibility to work some of the time from home is an advantage.
“Moreover, for the majority of younger employees, a significant part of their leisure time is connected to social events and friendships established within the workplace.
“Given all of this, we remain of the view that whilst working patterns may adapt, the office is very much here to stay.”
Circle’s net asset value per share dropped 4% to 274p in the year to March due to the impact of the pandemic, though this was better than the peer group, it added.
Rental income increased by 2% to £7.7mln with collections for the March and June 2021 quarters at 90% and 71% respectively.
Year-end loan to value was 46% and Circle said it will reduce this through asset sales or additional lettings to maintain its position as one of the top-performing quoted property companies measured by total returns (NAV plus dividends).
More than 96% of the total portfolio, valued at £132mln, is let and incoming producing, Circle added.
The final dividend of 4p per share (2p) brings the total for the year to 6.5p (5.3p), a 23% rise.
John Arnold, chief executive, said: “Our focused strategy of concentrating on our regional office assets has proven to be resilient in the challenging pandemic year.
“We have not been complacent and have actively managed our assets to make them fit for the new office world with well designed, flexible workspaces.
“We believe that although office working patterns may alter in the future, there still remains a strong demand, both professional and social, for office locations.
“This is particularly the case in regional locations where tenants can drive to work and are not reliant on using public transport”.
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