Our central Asset Management team ensures we pro-actively manage our income producing portfolio to drive rental and capital growth; as of year end 30th November 2018, the annualised passing rent on our £598 million portfolio stood at £39.4m.
Like-for-like rental income fell by 1.2% over the period, but this was solely driven by a £1m one-off at Trentham Gardens in the prior year, excluding which like-for-like rental income increased by 1.9%, with growth in industrial and logistics of 9.1%. Industrial and logistics now makes up 46% of our overall passing rent, up from 21% a year ago, and this share is expected to grow from here.
We have started to rebalance our portfolio towards the industrial and logistics sector where we see greater long-term structural growth, selling our smaller assets and retail assets to reinvest into industrial and logistics development and housebuilding – two of the most attractive sectors in the UK property market.
Last year we sold £529 million of assets, selling over half of retail portfolio for £177m, less than 1% below book value, plus £48m of small assets; nearly double the £100-150m initially targeted for the year.
Reinvesting the proceeds from these sales means we can bring forward our commercial developments and our Asset Management team works closely with the Commercial Development teams to identify the industrial and logistics developments that we should keep for the retained income portfolio.
We will also reinvest the proceeds into bringing forward our residential land and housebuilding developments, firmly placing the majority of our business into strong, long-term growth sectors. This strategy will mark a seismic shift for St. Modwen, driving performance, significantly improving the returns we generate for the business from our retained income portfolio and cementing our future as the UK’s market leader.