Hansteen: returning £580m to shareholders

UK and European property developer Hansteen Holdings (LON: HSTN) has today released their half-year report, which included the announcement that part of the proceeds from the sale of German and Dutch properties would be returned to shareholders.

The sale realises the value in the German and Dutch portfolio when occupancy and rent were at a high point for Hansteen ownership and also when the Euro/Sterling exchange rate was favourable.

The report also highlights the Groups pre-tax profit increased by 185.6% to £156.5m, as well as Normalised Total Profit increasing by 172.0% to £88.4m. An interim dividend will be issued, up 4.5% to 2.3p per share.

The half-year report numbers and news of £580m being returned to the Group's shareholders saw shares rise marginally this morning, up 3%.

Commenting on the report, joint Cheif Executives Ian Watson and Morgan Jones said:

"For the first time in many years, strong occupier demand has resulted in increasing rents per let sq ft and it looks as though this trend will continue. We believe there are constraints to new supply because, to feasibly build equivalent properties to those in our portfolio, a developer would need to achieve a rent of between £6 and £7 per sq ft. Furthermore, the appreciation by investors of our type of properties continues to grow and recent transactions would indicate that we could well benefit from further yield compression." 

Hansteen's market cap is currently £1bn, as they trade at a PE ratio of 27x vs. the industry median of 14x. Revenue for the Group has grown gradually in the five years to 2016, having doubled in that period. Operating and net profits peaked in 2015, after which both they fell by roughly a third.