Trading update and NAV

To:  Company Announcements
Date:  28 October 2022
Company:  CT Property Trust Limited
LEI:  231801XRCB89W6XTR23

Subject:  Trading Update and Net Asset Value

Headlines

· NAV per share of 122.0 pence and Net Asset Value total return of -7.3 per cent for the quarter ended 30 September 2022

· Share Price total return of -5.6 per cent for the quarter ended 30 September 2022

· As of 30 September 2022, the portfolio void rate was 5.4 per cent by estimated rental value

· Reduction in net gearing from an LTV of 22.1 per cent at 30 June 2022 to 18.3 per cent at 30 September 2022

Net Asset Value (‘NAV’)

The unaudited NAV per share of CT Property Trust Limited (‘CTPT’) as at 30 September 2022 was 122.0 pence. This represents a decrease of 8.1 per cent from the NAV per share as at 30 June 2022 of 132.8 pence and a NAV total return for the quarter of -7.3 per cent.

The NAV is based on the external valuation of the Company's property portfolio prepared by Cushman & Wakefield.

The NAV is calculated under International Financial Reporting Standards ("IFRS").

The NAV includes all income to 30 September 2022 and is calculated after the deduction of all dividends paid prior to that date.  

Breakdown of NAV movement

Set out below is a breakdown of the change to the unaudited net asset value per share calculated under IFRS over the period from 30 June 2022 to 30 September 2022.

	Pence per share	% of opening NAV
Net asset value per share as at 30 June 2022	132.8
Unrealised movement in valuation of property portfolio (including the effect of gearing)	(12.1)	(9.1)*
Realised gain on sale of property (including the effect of gearing)	0.5	0.4
Share buy-backs	0.9	0.7
Net revenue	0.9	0.7
Dividends paid	(1.0)	(0.8)
Net asset value per share as at 30 September 2022	122.0	(8.1)

* The un-geared unrealised capital return of portfolio over the quarter to 30 September 2022 was -7.7 per cent.

Performance

The capital value of the Company's portfolio fell by 7.7 per cent over the quarter as sentiment towards real estate, and wider financial markets, turned negative. The ‘mini budget’ presented on the 23 September 2022 compounded gilt market volatility and lower-yielding real estate assets in particular have found themselves exposed in the current inflationary environment.

Industrial

The capital value of the Company’s industrial assets declined by 9.5 per cent over the quarter which, while a meaningful adjustment, represents only a partial offsetting of the 36.0 per cent capital growth the portfolio’s industrial assets generated in the 12 months to June 2022. Portfolio management activity over the quarter demonstrated the underlying strengths of the Company’s industrial assets. Rent reviews settled at Lister Road, Basingstoke and Lakeside Industrial Estate, Colnbrook showed meaningful uplifts to passing rents at 23.7 per cent and 14.3 per cent respectively. Unit 2 Network in Bracknell became vacant in September but is already under offer to new occupier at a significant uplift on the previous passing rent. The crystallisation of rental growth through asset management initiatives such as these will be critical in delivering the income return.

Retail

The Company’s high street retail holdings saw a relatively limited valuation decline of 1.0 per cent over the quarter as an already attractive yield profile was supported by a number of leasing successes, maintaining near-full occupation. The capital value of the Company’s retail warehousing portfolio, which remains fully occupied by a discount/convenience-led ‘essential retail’ tenant base, fell by 5.7 per cent, again only partially offsetting capital gains of 22.9 per cent seen in the year to June 2022.

Offices

The capital value of the Company’s office assets fell by 5.6 per cent as the Company’s independent valuers adopted prudent assumptions given relatively constrained liquidity within the wider market. As reported in August 2022, the quarter saw the successful disposal of the prime multi-let office holding at 14 Berkeley Street, London, sold at a 4.9 per cent premium to the preceding valuation at £32.4m. The disposal was timed to take full advantage of the asset and market cycles and crystallised a significant profit.

The vacancy rate across the portfolio increased from 2.6 per cent to 5.4 per cent by rental value, driven entirely by the recent vacancy at the industrial holding at Network, Bracknell. However, as outlined above, this vacancy is now under offer and is an opportunity to extract rental growth and performance from the asset. The weighted average unexpired lease term, assuming all break options are exercised, increased from 6.1 years to 6.3 years, largely on account of the disposal of 14 Berkeley Street.

Cash and Borrowings

As at 30 September 2022, the Company had approximately £32.5 million of available cash and an undrawn revolving credit facility of £20 million. The £90 million long-term debt with Canada Life and the £20 million revolving credit loan facility with Barclays (which is undrawn) do not need to be refinanced until November 2026 and March 2025 respectively. The £7 million draw down from Barclays was repaid during the quarter. As at 30 September 2022, the LTV (net of cash) was 18.3 per cent.

Share Price

The share price was 78.4 pence per share as at 30 September 2022, which represented a discount of 35.7 per cent to the NAV per share announced above. The share price total return for the quarter was -5.6 per cent.

Share Buybacks

The Company purchased 6,100,000 ordinary shares during the quarter. As at 30 September 2022 the Company had 6,100,000 shares held in treasury (2.5 per cent of ordinary shares in issue), acquired at an average discount to NAV of 35.6 per cent.

Dividend

On 31 August 2022, the Company announced a quarterly dividend payment of 1.0 pence per ordinary share in respect of the financial year ended 30 June 2022, which was paid to shareholders on 30 September 2022. The Board will continue to monitor rental receipts and earnings closely and keep the future level of dividends under review.

Portfolio Analysis	£m	% of portfolio as at 30 September 2022	% capital value movement  in quarter
Offices	54.4	15.6	(5.6)
· South East	31.4	9.0	(3.9)
· Rest of UK	23.0	6.6	(7.8)
Industrial, logistics and distribution	203.2	58.0	(9.5)
· South East	203.2	58.0	(9.5)
Standard Retail	20.0	5.7	(1.0)
· West End	6.4	1.8	0.8
· Rest of London	1.3	0.4	(15.3)
· South East	8.9	2.5	-
· Rest of UK	3.4	1.0	(0.7)
Retail Warehouse	72.6	20.7	(5.7)
Total Property	350.2	100.0	(7.7)

Summary Balance Sheet

	£m	Pence per share	% of Net Assets
Property Portfolio per Valuation Report	350.2	149.3	122.3
Adjustment for lease incentives	(4.2)	(1.8)	(1.5)
Fair Value of Property Portfolio	346.0	147.5	120.8
Cash	32.5	13.8	11.3
Trade and other receivables	6.8	2.9	2.4
Trade and other payables	(9.0)	(3.8)	(3.1)
Interest-bearing loans	(90.0)	(38.4)	(31.4)
Net Assets at 30 September 2022	286.3	122.0	100.0

The property portfolio will next be valued by an external valuer during December 2022 and the net asset value per share as at 31 December 2022 will be announced in January 2023.

Important information

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service this inside information is now considered to be in the public domain.

Enquiries:

The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL
Tel: [phone]

Matthew Howard
Scott Macrae
Columbia Threadneedle Investment Business Limited
Tel: [phone]