(Alliance News) - Ground Rents Income Fund PLC on Monday reported a yearly net asset value fall amid the implementation of the building safety act in the UK.

The London-based investor in long-term, income-generating assets across the UK said its net asset value was 92.5 pence per share in its financial year that ended September 30, down from 103.1p the prior year.

Ground Rents Income Fund's portfolio value at September 30 was GBP109.0 million, down 8.7% from GBP119.4 million the previous year. The company explained this was due to the "challenging and complex regulatory environment" it was operating in.

"It was a particularly challenging year for the company, principally due to the complex issues emanating from the introduction of the Building Safety Act 2022 in April 2022," said Chair Barry Gilbertson.

"Conversely, the impact of future leasehold reform on the company remains both uncertain and, as yet, unknown."

The building safety act set out safety requirements for landlords of higher-risk buildings that are at least 18 metres or seven storeys high and with two or more residential units. The act was in response to the Grenfell Tower disaster in London.

Ground Rents Income Fund declared an annual dividend of 3.0 pence per share, down from 3.96p the previous year.

The company said it plans to move to semi-annual dividend payments during its asset realisation, and warned that the dividend may be withheld until the modified auditors report is removed. The modified auditors report was caused by the firm's auditors being unable to verify an independent valuer's judgement relating to a negative valuation adjustment of GBP11.4 million.

Ground Rents Income Fund's unaudited NAV on March 31, 2023 was 94.3p per share, an increase of 1.8p per share from the prior year.

Looking forward, the company warned that it "remains a challenging operating environment", but stated that "good progress is being made, and we have a clear strategy focussed on improving the liquidity of the underlying portfolio".

Ground Rents Income Fund shares were trading 0.4% lower at 39.75 pence in London on Tuesday morning.

By Will Neill, Alliance News reporter

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