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 [phone]

The Company Secretary

Northern Trust International Fund Administration Services (Guernsey) Ltd

Trafalgar Court

Les Banques

GY1 3Q1

Tel: [phone]

Fax: [phone]

 

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

 

END

 

 

NAVPGUQCCUPPGUC