Net Asset Value(s)

RNS Number : 9445B
Standard Life Invs Property Inc Tst
24 April 2012
 



STANDARD LIFE INVESTMENTS PROPERTY INCOME TRUST LIMITED

31 March 2012

 

 

Key Highlights

 

·      New seven year £84.4m loan facility, maturing 16 December 2018, drawdown during Q1 2012 on very attractive terms.

·      Value of properties declined 0.73% over the quarter compared to the IPD monthly index decline of 0.75%.

·      Cash held by the Trust was £18.8m at 31 March 2012. Cash reduced in April 2012 to £10.3m post completion of office purchase in Cheltenham.

·      Net asset value per ordinary share was 61.9p per share as at 31 March 2012, a decrease of 1.3% from 31 December 2011.

·      Based on a share price of 62.50p (23 April 2012) the dividend yield is 7.3%.

 

 

Net Asset Value

 

The unaudited net asset value per ordinary share of Standard Life Investments Property Income Trust Limited at 31 March 2012 was 61.9 pence.  This is a decrease of 1.3% percentage points over the net asset value of 62.7 pence per share at 31 December 2011.   

 

The net asset value is calculated under International Financial Reporting Standards ("IFRS") and includes a provision for payment of an interim dividend of 1.133p per ordinary share for the quarter to 31 March 2012.

 

The net asset value incorporates the external portfolio valuation by Jones Lang LaSalle at 31 March 2012.  The property portfolio will next be valued by an external valuer during June 2012 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 net asset value per share calculated under IFRS over the period 31 December 2011 to 31 March 2012.

 


Pence per share

% of opening NAV

Net Asset Value per share as at 31 December 2011

62.7*

-

Loss - realised and unrealised following revaluation of property portfolio (including the effect of gearing)

 

(0.8)

 

(1.3%)

Increase in interest rate swap valuations

0.4

0.6%

Other movement in reserves

(0.4)

(0.6)%

Net Asset Value per share as at 31 March 2012

61.9

(1.3)%

* audited

 

 

Investment Manager Commentary

 

The IPD monthly index showed a capital decline of 0.75% over Q1. The decline in values was driven by poorer secondary investments, with continued risk aversion from most investors. Transaction levels and available investments remained subdued in Q1, and this pattern is expected to continue through the rest of 2012. The Company saw a fall in the value of its properties of 0.73% over the quarter, in line with the IPD Monthly index, and, mainly due to a movement in values on some of the shorter let properties and lack of favour of ROUK offices, which have seen no capital recovery since the downturn generally, and now provide an attractive income return.

During Q1 2012 the void level in the portfolio was reduced slightly to 4.9% from 5.1% in Dec 2011 following the completion of an agreement for lease on a retail warehouse in Hull. The Company also completed a surrender and re-letting of an industrial unit in Aberdeen where the original lease was due to expire in December 2012 and just after the quarter end completed the letting of the last vacant unit on the multi let industrial estate in Aberdeen. In addition, the Company completed a re-gear of its lease to Halfords in Paisley, increasing the term certain from two years to ten.

 

The Company had a cash holding of £18.8m at the quarter end, and is seeking to invest this into income producing investments. The Company has issued a separate announcement confirming its purchase of a multi let office in Cheltenham for a price of £8.45m, reflecting an income yield of 7.4% on day one, rising to 9% in December 2012 on the expiration of rent frees, and over 10% once the top floor is re-let following a lease expiry and refurbishment. A second purchase is in solicitor's hands for £4m at a yield of 9.5%.

 

During the quarter the negative movement in revenue reserves was due to a combination of one off costs from the new debt facility and an uncovered dividend pending re-investment of the Northern & Shell sale proceeds.

 

 

Cash position

 

As at 31 March 2012 the Company had borrowings of £84.4m and a cash position of £18.8m (excluding rent deposits) therefore cash as a percentage of debt was 22.3%. On 23 April 2012 the Company announced the purchase of an office in Cheltenham for £8.45m resulting in a cash position of £10.3m post completion.

 

 

Loan to value ratio

 

As at 31 March 2012 the loan to value ratio (assuming all cash is placed with RBS as an offset to the loan balance) was 41.1% (31 December 2011: 41.1%).  The covenant level is 65%.

 

 

Interest Rate Swaps

 

The interest rate swaps had a positive impact on the NAV of 0.4p per share or 0.6% over the quarter, and the fair value liability is £(5.6)m as at 31 March 2012. This fair value will reduce to £nil by December 2018, although not on a straight line basis.

 

 

Total asset analysis as at 31 March 2012

 


£m

%

Office

71.5

39.7

Retail

38.3

21.3

Industrial

46.4

25.8

Other

3.7

2.1

Total Property Portfolio

159.9

88.9

Cash

18.8

10.4

Other Assets

1.3

0.7

Total Gross Assets

180.0

100.0

 

 

 

 

 

Breakdown in valuation movements over the period 31 December 2011 to 31 March 2012

 


Exposure as at 31 Mar 2012 (%)

Capital Value Movement on Standing Portfolio (%)

£m

External Valuation at 31/12/2011



162.1

Sub Sector Analysis:




RETAIL




South East Retail

6.2

0.0

0.0

Retail Warehouses

17.7

0.0

0.0





OFFICES




Central London Offices

9.8

0.0

0.0

South East Offices

17.6

(1.0)

(0.3)

Rest of UK Offices

17.3

(1.7)

(0.5)





INDUSTRIAL




South East Industrial

4.8

(0.7)

(0.1)

Rest of UK Industrial

24.3

(0.8)

(0.3)





OTHER

2.3

0.0

0.0





Sales during Q1 2012

-

(0.6)

(1.0)





External Valuation at 31/03/2012

100

(0.7)

159.9

 

 

The above information is unaudited and has been calculated by Standard Life Investments.

 

All Enquiries:

 

Jason Baggaley - Real Estate Fund Manager Standard Life Investments

Tel 0131 245 2833

 

The Company Secretary

Northern Trust International Fund Administration Services (Guernsey) Ltd

Trafalgar Court

Les Banques

GY1 3Q1

Tel: 01481 745324

Fax: 01481 745085

 

Appendix 1

 

Historical adjusted IFRS NAVs per Ordinary Share are as follows:

 

31/03/12

  61.91p


31/12/11

  62.72p


30/09/11

  61.49p


30/06/11

  62.22p


31/03/11

  64.09p


31/12/10

  63.00p


30/09/10

  61.37p


30/06/10

  61.33p


31/03/10

  59.56p


31/12/09

  56.63p


30/09/09

  51.28p


30/06/09

  50.53p


31/03/09

  52.49p


31/12/08

  61.65p


30/09/08

  87.24p


30/06/08

101.59p


31/03/08

102.71p


31/12/07

111.60p


30/09/07

130.70p


30/06/07

137.16p


31/03/07

134.42p


31/12/06

132.68p


30/09/06

129.51p


30/06/06

130.20p


31/03/06

124.28p


31/12/05

116.46p


30/09/05

107.12p


30/06/05

103.88p


31/03/05

101.34p


31/12/04

  99.00p


 

 

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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