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. The company has repurchased 24.5m ordinary shares by way of a previously declared 2018 final distribution of 1.75p (two shares in every 51 at 45p).
Russian economic growth continues but at a slower pace, while the increased VAT rate has put some upward pressure inflation. A continuing positive demand-supply balance is forecast in warehouse sector, a positive indicator for rents and vacancy.