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 20^th 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 [phone]

Rona Grant - 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:

31/12/11	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

 

END

 

 

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