Net Asset Value

To:                  Company Announcements
Date:               25 October 2018
Company:         F&C Commercial Property Trust Limited
LEI:                 213800A2B1H4ULF3K397

Subject:           Net Asset Value
 

Net Asset Value

The unaudited net asset value (‘NAV’) per share of the Group as at 30 September 2018 was 141.8 pence. This represents a decrease of 1.0 per cent from the unaudited NAV per share as at 30 June 2018 of 143.2 pence and a NAV total return for the quarter of 0.1 per cent.

The NAV has been calculated under International Financial Reporting Standards (‘IFRS’). It is based on the external valuation of the Group’s direct property portfolio prepared by CBRE Limited.

The NAV includes all income to 30 September 2018 and is calculated after deduction of all dividends paid prior to that date. As at 30 September 2018, no adjustments were required to the NAV in respect of dividends for which the share price had gone ex-dividend.

Share Price

The share price was 139.60 pence per share at 30 September 2018, which represented a discount of 1.6 per cent to the NAV per share announced above. The share price total return for the quarter was -6.4 per cent.

Analysis of Movement in NAV

The following table provides an analysis of the movement in the unaudited NAV per share for the period from 30 June 2018 to 30 September 2018 (including the effect of gearing):

	£m	Pence per share	% of opening NAV per share
NAV as at 30 June 2018	1,144.9	143.2
Unrealised increase in valuation of property portfolio *	(9.1)	(1.1)	(0.8)
Movement in fair value of interest rate swap	0.2	0.0	0.0
Other net revenue	9.4	1.2	0.8
Dividends paid	(12.0)	(1.5)	(1.0)
NAV as at 30 September 2018	1,133.4	141.8	(1.0)

* The ungeared decrease in the valuation of the property portfolio over the quarter to 30 September 2018 was 0.6%, after allowing for capital expenditure.

The net gearing at 30 September 2018 was 20.8%. #

# Net gearing: (Borrowings – cash) ÷ total assets (less current liabilities and cash).

Performance

The capital value of the portfolio decreased by 0.6% over the quarter. The IPD Monthly Index recorded capital value growth of 0.4% over the period.

The largest impact on NAV was due to valuation write downs on the Company’s retail warehouses and specifically Newbury Retail Park, Newbury and Solihull Retail Park, Solihull. This quarter both properties were impacted by the Homebase Company Voluntary Arrangement (CVA) and the Administration of Poundworld at Newbury. Asset Management of these assets is focussed on securing revised planning consents for the change of use and division of units and will be a priority for the Manager over the short term.

Portfolio Analysis – Sector Breakdown

	Market Value £m	% of portfolio as at 30 September 2018	% unrealised movement in quarter
Offices	533.9	36.9	-0.2
West End	154.8	10.7	-1.1
South East	131.6	9.1	-0.3
South West	32.4	2.2	1.2
Rest of UK	194.8	13.5	0.2
City	20.3	1.4	1.4
Retail	445.2	30.8	0.1
West End	344.9	23.9	0.1
South East	68.4	4.7	-0.1
Rest of UK	31.9	2.2	0.0
Industrial	255.2	17.7	2.1
South East	59.3	4.1	3.7
Rest of UK	195.9	13.6	1.6
Retail Warehouse	167.6	11.6	-7.4
Other	43.5	3.0	0.0
Total Property Portfolio	1,445.4	100.0	-0.6

Portfolio Analysis – Geographic Breakdown

	Market Value £m	% of portfolio as at 30 June 2018	% unrealised movement in quarter
West End	499.7	34.6	-0.3
South East	351.0	24.3	-2.3
Midlands	175.2	12.1	-2.0
Scotland	173.6	12.0	0.0
North West	163.1	11.3	2.0
South West	32.4	2.2	1.2
Eastern	30.1	2.1	2.7
Rest of London	20.3	1.4	1.4
Total Property Portfolio	1,445.4	100.0	-0.6

Top Ten Investments

	Sector
Properties valued in excess of £250 million
London W1, St Christopher’s Place Estate *	Retail
Properties valued between £100 million and £150 million
London SW1, Cassini House, St James’s Street	Office
Properties valued between £70 million and £100 million
Newbury, Newbury Retail Park	Retail Warehouse
Properties valued between £50 million and £70 million
Solihull, Sears Retail Park	Retail Warehouse
London SW19, Wimbledon Broadway	Retail
Properties valued between £40 million and £50 million
Crawley, Leonardo House, Manor Royal	Office
Winchester, Burma Road	Other
Manchester, 82 King St	Office
Properties valued between £30 million and £40 million
Aberdeen, Unit 2 Prime Four Business Park, Kingswells	Office
Uxbridge, 3 The Square, Stockley Park	Office

*Mixed use property of retail, office and residential space.

Summary Balance Sheet

	£m	Pence per share	% of Net Assets
Property Portfolio per Valuation Report	1,445.4	180.8	127.6
Adjustment for lease incentives	(21.3)	(2.7)	(1.9)
Fair Value of Property Portfolio	1,424.1	178.1	125.7
Debtors	25.8	3.2	2.3
Cash	12.5	1.6	1.1
Interest rate swap	0.2	-	-
Current Liabilities	(19.4)	(2.4)	(1.7)
Total Assets (less current liabilities)	1,443.2	180.5	127.4
Non-Current liabilities	(1.9)	(0.2)	(0.2)
Interest-bearing loans	(307.9)	(38.5)	(27.2)
Net Assets at 30 September 2018	1,133.4	141.8	100.0

Property Purchases and Sales

The were no purchases or sales during the quarter.

Borrowings

The Group’s borrowings consist of a £260 million loan with a term to 31 December 2024 and a fixed interest rate of 3.32 per cent per annum. The Group also has a £50 million bank loan with a term to 21 June 2021 on which the interest rate has been fixed, through an interest rate swap of the same notional value and duration, at 2.522 per cent per annum. In addition, the Board has agreed an additional revolving credit facility of £50 million with Barclays over the same period, to be used for ongoing working capital purposes and to provide the Group with the flexibility to acquire further property should the opportunity arise.

The Group’s weighted average cost of debt is 3.3 per cent per annum.

Key Information

This statement and further information regarding the Company, including movements in the share price since the end of the period and the Group’s most recent annual and interim reports, can be found at the Company’s website fccpt.co.uk.

The next quarterly valuation of the property portfolio will be conducted by CBRE Limited during December 2018 and it is expected that the unaudited NAV per share as at 31 December 2018 will be announced in January 2019.

This announcement contains inside information.

Enquiries:

Richard Kirby
BMO REP Asset Management plc
Tel: [phone]

Graeme Caton
Winterflood Securities Limited
Tel: [phone]