The chairman of a North East listed property investment fund has slated working-from-home as a “useless” initiative forcing “productivity towards zero”.

John Newlands is chair of Newcastle-based Develop North PLC, which changed it name from TOC Property Backed Lending Trust in May, a fund launched six years ago to build up a multimillion-pound development cash pot. The fund supports residential and commercial projects across the North East and Scotland and has published results for the six months ending May 31, a period of economic disruption triggered by inflationary pressures and prolonged impacts of the Covid-19 pandemic.

The figures show that the total value of the company’s portfolio now stands at £23.9m from 19 live projects, following growth of £6.7m in the gross value of loans and receivables. Mr Newlands, who left Brewin Dolphin as head of investment five years ago, uses his interim report to hail a recent uplift in construction activity, but criticizes the enforced working-from-home initiative.

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He said: “Only a short time ago the country was amidst full or partial lockdown, characterised by deserted construction sites and empty travel depots. In this situation the much-lauded ‘working from home’ initiative beloved of the UK public sector was quite useless and where productivity was forced towards zero.

“We now see building sites coming to life, cranes moving, old projects re-starting and new schemes being placed on the drawing board. Under its much more dynamic and appropriate new name of Develop North PLC, the company stands ready to move on to the next phase of its life.”

Mr Newlands said the company entered its sixth year of trading against a continuing background of economic disruption, sharply rising inflation, upwards pressure on interest rates and a prolonging of the Covid-19 pandemic. A year ago he said the group took the decision to “target somewhat lower investment returns - in the nearer term, at least - and to ‘cherry pick’ new investment opportunities”, saying the new policy continues to offer the best risk/reward trade off.

The company’s Net Asset Value per share decreased from 83.9p to 83.1p over the period and an interim dividend of 1p per share was due to have been paid on June 30.

During the period Develop North agreed two new loans, including a £2.2m, nine-month facility to fund the construction of four family homes in Morpeth, Northumberland, and a £1.9m facility to fund the construction of executive homes across two sites in Darras Hall, Ponteland and Stocksfield, Northumberland. A total of £8.2m has been ploughed into six projects during the year and there is currently £3.5m at various stages of due diligence across two projects in the region.

John Newlands, Chairman of Develop North PLC

Further funds have been invested in facilities created during the second half of last year, which has significantly increased the loan book, which the company said will support portfolio revenues over future months and years.

Ian McElroy chief executive of Tier One, the investment adviser and fund manager to Develop North, gave an overview of the residential and commercial property sectors, highlighting how the strong housing market’s growth is set to slow.

He added: “The company continues to be selective in the level of exposure to commercial developments. We believe our selective approach to the company’s deployment in the commercial property sector will continue to create shareholder value.”

In June Develop North secured a £6.5m debt facility from Shawbrook.