Raven Property Group (formerly Raven Russia) invests mainly in Class A warehouses in Russia. It also owns three office buildings in St Petersburg, a third-party logistics company in Russia and a residential development company in the UK.
FY18 operational performance showed strong improvement against the backdrop of a strengthening Russian economy and warehouse market, with high levels of demand. Warehouse occupancy increased from 81% to 89% over the year, and reached 90% soon after, and acquisitions are making a significant contribution to income while prime rents are firming. In underlying rouble terms, rental income grew from RUB7.2bn to RUB7.7bn and the portfolio value increased by 8%. Although both were lower in sterling terms, as currency moves continued to have a negative impact (the rouble weakened 13% versus sterling), much progress has been made in eliminating the mismatch between increasingly rouble-denominated rents and legacy US dollar debt. A final distribution of 1.75p will be made by way of a tender offer buyback of two shares in every 51 at 45p. We are currently reviewing our numbers for the results and switch to sterling reporting.
Russian economic growth continues, although tax increases may slow the rate in 2019 while increasing inflation. A continuing positive demand-supply balance is forecast in warehouse sector, a positive indicator for rents and vacancy.