Market forces breaking news: Minerva hurt by property slump

Published 05th Oct 2009

• Minerva's real estate portfolio devalued by 28.4%
• HSBC sells and leases back its New York offices
• Wolfson: We're keeping things tight


Is the worst of the property crash behind us? Minerva certainly hopes so, after falling prices and demand left it nursing a £289m annual loss.

The real estate developer suffered the loss after revaluing its portfolio, which includes some impressive-sounding developments in the heart of London, down by over 28%.

Despite the loss, chairman Oliver Whitehead believes market conditions may be about to improve:

"Over the last two years, property values have fallen sharply as a result of the prevailing economic conditions and, in particular, the scarcity of funding. There has however been recent evidence that the demand for prime real estate in the UK is improving and investment yields hardening."

If you ignore the property revaluation, Minerva made a pre-tax loss of £4.6m in the year to 30 June, an improvement on the £12.8m it lost the previous year.

Minerva has also taken a hit after taking out derivative contracts on the assumption that interest rates would be rather higher than they are today.

And sticking with property for a moment, HSBC has agreed a sale-and-leaseback agreement over its New York headquarters, on 5th Avenue.

Elsewhere, Aviva says it is ploughing on with its plan to float its Dutch subsidiary, Delta Lloyd, probably next month.

PZ Cussons, whose products include Imperial Leather soap, says it is more profitable than a year ago despite the recession.

And Wolfson Microelectronics has reported that revenues are in line with previous forecasts, and that it is keeping its backlog of new products under close control. The computer chipmaker is still facing a tough time, though:

Second half revenue forecast and backlog have been adversely affected by a faster than anticipated shift in product mix at a major customer following a previously announced design loss. Overall visibility of end customer demand remains poor, with very short lead times and volatile ordering patterns.

Source: ' Guardian '

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