Net Asset Value(s)

RNS Number : 0772W
Standard Life Invs Property Inc Tst
24 January 2012
 



STANDARD LIFE INVESTMENTS PROPERTY INCOME TRUST LIMITED

31 December 2011

 

Key Highlights

 

·      Property worth £12.2m sold in Q4 2011

·      Cash held by the Trust was £17.8m at 31 December 2011

·      Based on a share price of 58.25p (20 January 2012) the dividend yield is 7.8%

·      Net asset value per ordinary share was 62.8p per share as at 31 December 2011, an increase of 2.1% from 30 September 2011

 

Net Asset Value

 

The unaudited net asset value per ordinary share of Standard Life Investments Property Income Trust Limited at 31 December 2011 was 62.8 pence.  This is an increase of 2.1% percentage points over the net asset value of 61.5 pence per share at 30 September 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 December 2011.

 

The net asset value incorporates the external portfolio valuation by Jones Lang LaSalle at 31 December 2011.  The property portfolio will next be valued by an external valuer during March 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 30 September 2011 to 31 December 2011.

 


Pence per share

% of opening NAV

Net Asset Value per share as at 30 September 2011

61.5

-

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

 

0.4

 

0.6%

Increase in interest rate swap valuations

0.6

1.0%

Other movement in reserves

0.3

0.5%

Net Asset Value per share as at 31 December 2011

62.8

2.1%

 

Cash position

 

As at 31 December 2011 the Company had borrowings of £84.4m and a cash position of £17.8m (excluding rent deposits) therefore cash as a percentage of debt was 21.1%.

 

Loan to value ratio

 

As at 31 December 2011 the loan to value ratio (assuming all cash is placed with RBS as an offset to the loan balance) was 41.1% (30 September 2011: 44.5%).  The covenant level is 65%.

 

Interest Rate Swaps

 

The interest rate swaps had a positive impact on the NAV of 0.6p per share or 1.0% over the quarter, and the fair value liability is £(6.1)m as at 31 December 2011. This fair value will reduce to £nil by Dec 2013, although not on a straight line basis.

 

Total asset analysis as at 31 December 2011 (unaudited)

 


£m

%

Office

73.3

40.3

Retail

38.3

21.1

Industrial

46.8

25.7

Other

3.7

2.0

Total Property Portfolio

162.1

89.1

Cash

17.8

9.8

Other Assets

2.0

1.1

Total Gross Assets

181.9

100.0

 

Breakdown in valuation movements over the period 30 September 2011 to 31 December 2011

 


Exposure as at 31 Dec 2011 (%)

Capital Value Movement on Standing Portfolio (%)

£m

External Valuation at 30/09/2011



173.4

Sub Sector Analysis:




RETAIL




South East Retail

6.1

0.0

0.0

Retail Warehouses

17.5

0.0

0.0





OFFICES




Central London Offices

13.8

6.0

1.3

South East Offices

13.5

0.0

0.0

Rest of UK Offices

18.0

(1.5)

(0.4)





INDUSTRIAL




South East Industrial

4.7

3.5

0.2

Rest of UK Industrial

24.1

(0.5)

(0.2)





OTHER

2.3

1.3

0.0





Sales during Q4 2011

-

1.7

(12.2)





External Valuation at 31/12/2011

100

0.4

162.1

 

Investment Manager Commentary

 

In December 2011 the Company signed a new Debt facility with RBS to replace its existing facility of £84.4m which was due to expire in December 2013. The Company has now drawn down in full the new facility and entered into new interest rate hedges to give a cost of debt of 6.38% until December 2013, reducing to 3.76% from Jan 2014 to expiry of the facility in December 2018. The all in cost prior to the new facility was 6%. The Company retained its existing hedge of £72m due to expire in Dec 2013 as it had a liability of £6.1m (4.5p per share) as at 31 December 2011. That hedge will unwind (although not on a straight line basis) by Dec 2013 to a value of £0. For the avoidance of doubt, the new facility will be used to repay the old facility, with no change to the Company's level of borrowings.

 

The new facility has an LTV covenant of 65% for the first 5 years (same as old covenant), and 60% for the final 2 years. The old ICR covenant of 170% has been reduced to 150% of net rental income.

 

During Q4 the Company completed the sale of Northern and Shell Tower in the Docklands for £12.2m, reflecting a yield of 7%. The Company had bought the property for £10m in 2009 (a yield of 8.6%). The Company also exchanged contracts for the sale of a small office in Leeds for £1.025m, and the sale completed on 20th January 2012.

 

In addition, the Company successfully regeared a number of leases which had an expiry or tenant break in 2012, 2013 and 2014. Three leases with an expiry event in 2012 have been renewed or the break removed, representing 79% of the rent at risk in 2012. Only £250,000 of rent is at risk through lease event now in 2012. Two leases have been regeared with breaks in 2013, representing 68% of income at risk that year, leaving only £130,000 at risk of break / expiry in 2013. One lease has been regeared with an expiry in 2014, giving a new 10 year term.

 

The Company's void rate at the end of December 2011 was 5.1%. The Company experienced the failure of a tenant on a retail park in Hull, however our valuations had already assumed no rent from that unit in 2012, and we have achieved a change of use to widen the planning consent, and have agreed a new lease to Smyth's Toys on the unit (due to complete in April 2012). We also completed the letting of two small industrial units in Aberdeen at a rent of £40,000pa, and a small office floor in Leeds for £30,000pa.

 

In Q4 2011 the Company's property portfolio has a total return of 2.2%, against the IPD Monthly index total return of 1.6%. Over the 12 months to December 2011 the Fund returned 6.5% (IPD monthly 8.1%) and over 3 years the fund returned 9.0%pa (IPD Monthly 8.1% pa).

 

Based on unaudited accounts for the year end the Company had a fully covered dividend (107%) for 2011.

 

* Source:- Standard Life Investments

 

All Enquiries:

 

 

Jason Baggaley - Real Estate Fund Manager Standard Life Investments

Tel 0131 245 2833

 

Rona Grant - Real Estate Fund Manager Standard Life Investments

Tel 0131 245 3890

 

 

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:

 

31/12/11

  62.76p


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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