Slow net asset growth hits Peel

SHARES in Peel Holdings fell 12p to 298p yesterday after the property investor announced a disappointing rise in net assets during the year to March.

It was the second piece of bad news in a week for Peel, which recently heard its plans to develop a million sq ft shopping centre at Trafford Park near Manchester had been thrown out by the Court of Appeal.

Analysts were surprised that the value of Peel's portfolio, with the exception of its out-of-town retail assets, had fallen when most other property companies have been announcing sharp rises in values.

Peel's office and industrial properties fell by 16 and 19 per cent respectively. Town centre retail assets declined by 2 per cent.

Rents in offices continued to fall, though this was partly offset by a hardening in yields. Empty space represented 37 per cent of the office portfolio because of a high proportion of voids at Salford Quays, a waterside development in Greater Manchester.

Only a 28 per cent rise in the out-of-town portfolio pushed assets as a whole up from 315p per share to 328p. Analysts said the lack of increase suggested that last year's figures were optimistic.

John Whittaker, chairman, confirmed that Peel would take its fight to build the Dumplington shopping centre to the House of Lords. Planning permission was granted in 1993 after two public inquiries and Peel is confident that it will be reinstated.

The 304-acre site remains on the books at a value of pounds 18.1m.

The other significant feature of the year was the completion, after a bitter 10-year struggle, of the takeover of Manchester Ship Canal Company, owner of the Dumplington site.

Peel finally paid five times more than its original offer to buy out minority shareholders.

Pre-tax profits in the year to March rose from pounds 9.4m to pounds 10.2m. After a reduced tax charge, earnings per share increased from 2.4p to 6.1p and a final dividend of 3.2p made a total of 4.5p (4p).