LONDON - KCR Residential REIT plc, a company specializing in residential real estate investment, has reported a slight increase in revenue for the half-year ending December 31, 2024, despite a challenging operating environment characterized by high interest rates and persistent cost pressures.
The group’s revenue saw a marginal rise of 0.5% to $950,000 compared to $946,000 in the previous year, primarily driven by growth in core rental income. This growth was partially offset by a decline in transactional income within its retirement portfolio. Notably, the company achieved positive operating cash flow for the first time, with net cash from operations amounting to $32,000, a significant improvement from the previous year’s deficit of $119,000.
KCR has been actively managing its portfolio, including the acquisition and refurbishment of an additional flat in Heathside, which is now being let. The company’s primary focus remains on optimizing performance from existing assets and controlling costs in pursuit of a cash neutral position.
However, the group faces increased financial pressure due to the expiration of fixed-rate facilities with Hodge Bank. The process of refinancing these facilities is underway, with current market rates substantially higher than the previous fixed rate of 3.50%. As a result, finance costs are expected to rise by approximately $200,000 per annum.
Despite these challenges, portfolio level occupancy has remained strong, and rental increases have been achieved upon renewals and re-lettings. The company continues to implement its strategy, as outlined in the previous annual report, to improve rental revenue, upgrade portfolio quality, explore development opportunities, and reduce costs where possible.
The announcement, which contains inside information for the purposes of the UK Market Abuse Regulation, was issued by the directors of KCR Residential REIT plc, who are responsible for its release. The company cautions that certain statements in the announcement may be forward-looking and are based on current expectations and assumptions, which may change over time.
The information is based on a press release statement.
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