Unaudited Net Asset Value
28 January 2015
STANDARD LIFE INVESTMENTS PROPERTY INCOME TRUST LIMITED (LSE: SLI)
Unaudited Net Asset Valueas at 31 December 2014
Key Highlights
* Net asset value per ordinary share was 74.4p as at 31 December 2014 which
is arrived at after deducting the Q4 dividend due to be paid in February
2015. This is an increase of 3.5% from 30 September 2014.
* Successful placing of approximately 26.5m ordinary shares at 75.5p per
share under the Placing Programme announced on 13 November 2014, raising
gross proceeds of approximately £20.0m.
* Five industrial properties purchased in November 2014 for £23.8m excluding
costs and one retail property purchased in November 2014 for £10.1m
excluding costs.
* Dividend yield of 5.7% based on share price of 81.0p (26 January 2015).
* Current market capitalisation - £200m.
Net Asset Value ("NAV")
The unaudited net asset value per ordinary share of Standard Life Investments
Property Income Trust Limited ("SLIPIT") at 31 December 2014 was 74.4 pence
including the adjustment for the Q4 dividend payment due in February 2015. This
is an increase of 3.5% over the net asset value of 71.9 pence (including the
adjustment for the Q3 dividend) per share at 30 September 2014. The net asset
value is calculated under International Financial Reporting Standards ("IFRS").
The net asset value incorporates the external portfolio valuation by Jones Lang
LaSalle at 31 December 2014. The property portfolio will next be valued by the
external valuer during March 2015 and the next quarterly net asset value will
be published thereafter.
Breakdown of NAV movement
Set out below is a breakdown of the change to the unaudited NAV per share
calculated under IFRS over the period 30 September 2014 to 31 December 2014.
£m Pence % of opening
per NAV
share
Unaudited Net Asset Value at 30 September 2014 159.1 73.1 -
Gain - realised and unrealised following 6.8 3.0 4.3%
revaluation of property portfolio (including the
effect of gearing)
Increasein unrealised interest rate swap (1.8) (0.8) (1.1%)
liability
0.5 0.2 0.3%
Other movement in reserves
Increase in share capital 19.8
Unaudited Net Asset Value at 31 December 2014
before
adjustment for dividend 184.4 75.5 3.5%
Adjustment for Q4 dividend (2.8) (1.1)
Unaudited Net Asset Value at 31 December 2014
after adjustment for dividend 181.6 74.4
European Public Real Estate Association 31Dec 2014 30 Sept 2014
("EPRA")*
EPRA Net Asset Value before adjustment £187.1m £160.0m
for dividend
EPRA Net Asset Value after adjustment £184.3m £157.5m
for dividend
EPRA Net Asset Value per share before 76.6p 73.5p
adjustment for dividend
EPRA Net Asset Value per share after 75.5p 72.3p
adjustment for dividend
The Net Asset Value per share is calculated using 244,216,165 shares of 1p each
being the number in issue on 31 December 2014.
*The EPRA net asset value measure is to highlight the fair value of net assets
on an on-going, long-term basis. Assets and liabilities that are not expected
to crystallise in normal circumstances, such as the fair value of financial
derivatives, are therefore excluded.
Investment Manager Commentary
The Company continued its active year with a further equity raise and purchase
of assets in Q4. We remained focussed on protecting existing shareholder value,
raising the new equity at a 5% premium to NAV, and then investing the equity
quickly into a pre identified portfolio to minimise cash drag.
A portfolio of five industrial / logistics units was purchased at a yield of
7.3% achieving further investment into a strong sector with some scope for
asset management. The Company also acquired a mixed use retail and leisure
investment in Glossop for £10.1m, giving it access to some new strong tenants
and an asset with scope for future growth. As a result of these purchases the
Company had a very low level of free cash at year end. However, in January, we
completed the sale of a small office in Weybridge for £3.2m and the proceeds
will be used for the refurbishment of some industrial units in Aberdeen and at
an office in Farringdon, London.
At a portfolio level the standing portfolio saw capital growth of 3.3% (IPD
monthly index 2.9%) which included an uplift from the sale of a small office in
Weybridge at a premium of £1.0m to its previous valuation of £2.2m.The
valuation of the Swindon asset had a negative impact. We had been close to
agreeing terms on a letting to Asda but with the challenges in the food sector
the letting has fallen away and we have reduced the valuation as a result. The
Company had a NAV total return for Q4 of 4.9% and 23.2% for 2014.
On 1 January 2015 the Company converted to being a UK REIT so, although it
remains a Guernsey registered company, it has moved onshore for tax residency.
The Company had a dividend cover of 100.7% in 2014, even after recognising the
write down of its deferred tax asset of £0.6m as a revenue item. After adding
back this item the dividend cover was 107.2%.
Cash position
As at 31 December 2014 the Company had borrowings of £84.4m and a cash position
of £5.4m (excluding rent deposits) therefore cash as a percentage of debt was
6.4%.
Dividends
The Company paid an interim dividend in respect of the quarter ended
30 September 2014, of 1.161p per Ordinary Share, with ex-dividend and payment
dates of 13 November 2014 and 28 November 2014 respectively.
Loan to value and interest rate
As at 31 December 2014 the loan to value ratio (assuming all cash is placed
with RBS as an offset to the loan balance) was 29.3% (30 September 2014:
27.9%). The bank covenant level is 65%.As a result of interest rate swaps the
weighted average interest rate on the loan is fixed at 3.8% until the loan
matures in December 2018.
The Company has two interest rate hedges which mature in December 2018 and have
a current liability of £2.7m (30 September 2014: £0.9m). These had a negative
impact on the NAV of 0.8p per share or 1.1% over the quarter.
Net Asset analysis as at 31 December 2014 (unaudited)
£m %of net
assets
Office 114.3 62.0
Retail 47.1 25.6
Industrial 108.7 58.9
Total Property Portfolio 270.1 146.5
Adjustment for lease (1.8) (1.0)
incentives
Fair value of Property 268.3 145.5
Portfolio
Cash 5.4 2.9
Other Assets 4.4 2.4
Total Assets 278.1 150.8
Non-current liabilities (86.7) (47.0)
Current liabilities (7.0) (3.8)
Total Net Assets 184.4 100.0
Breakdown in valuation movements over the period 1 Oct 2014 to 31 Dec 2014
Exposure as Capital Value Capital
at 31 Dec Movement on Value
2014 (%) Standing Movement on
Portfolio (%) Portfolio (£m)
External Property Valuation 228.1
at 30 Sep 2014
Sub Sector Analysis:
RETAIL
South East Retail 4.1 0.0 0.0
Retail Warehouses 13.3 1.8 10.9*
OFFICES
Central London Offices 9.7 6.8 1.7
South East Offices 21.7 3.7 2.1
Rest of UK Offices 11.0 3.2 0.9
INDUSTRIAL
South East Industrial 8.9 5.4 15.1*
Rest of UK Industrial 31.3 2.6 11.4*
External Property Valuation 100.0 3.3 270.2**
at 31 Dec 2014
*Due to purchase of five industrial investments and one retail investment
**Adjusted to exclude sales costs of properties held for sale at 31 December2014
Top 10 Properties
31 Dec 2014 (£m)
White Bear Yard, London 15-20
Chester House, Farnborough 15-20
Symphony, Rotherham 15-20
Denby 242, Denby 10-15
Hertford Place, Rickmansworth 10-15
St James's House, Cheltenham 10-15
Hollywood Green, London 10-15
3B - C Michigan Drive, Milton Keynes 10-15
Howard Town Retail Park, Glossop 10-15
Bourne House, Staines 5-10
On 20 January 2015 the Company completed the sale of De Ville Court, an office
investment in Weybridge for £3.2m excluding costs.
The Board is not aware of any other significant events or transactions which
have occurred between 31 December 2014 and the date of publication of this
statement which would have a material impact on the financial position of the
Company.
Details of the Company may also be found on the Investment Manager's website
which can be found at:www.standardlifeinvestments.com/its
For further information:-
Jason Baggaley - Real Estate Fund Manager Standard Life Investments
Tel +44(0) 1312452833 or jason_baggaley@standardlife.com
Gordon Humphries - Head of Investment Companies Standard Life Investments
Tel +44 (0) 131 245 2735 or gordon_humphries@standardlife.com
The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Ltd
Trafalgar Court
Les Banques
St Peter Port
GY1 3QL
Tel: 01481 745001
Fax: 01481 745085
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