At one time J Smart (LSE:SMJ), the Edinburgh-based family-controlled property company, concentrated on being a constructor of commercial property for other organisations. Today, that business is diminishing after years of losses. Now the main attraction for share investors is the large collection of industrial units and offices it owns and rents out in the Scottish Central belt.
The company holds 1m sqft of property available for letting. Three-quarters of the value is in industrial units; the remainder offices.
Investment property is revalued by the directors each year, with a sample checked by professional valuers.
Market capitalisation of J Smart: £1.253 x 42.4m shares = £53.1m.
Net income from renting and servicing offices is around £5m. This source of income decreased in 2020 because a lease on one industrial unit came to an end and J Smart directors took the opportunity to demolish with the view of building later. The vacant land is held with inventories as “land held for development”. In 2020 “Excluding the rent from this property, over the remainder of our investment property portfolio our rental income has increased due to both rental growth and increased occupancy” (2020 Report). Not many landlords can say that for the pandemic year.
Notwithstanding the 2020 dip, note the steady rise in net rent income in recent years. ………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
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