Net Asset Value(s)

RNS Number : 0750K

Standard Life Invs Property Inc Tst

24 July 2013

 



24 July 2013

 

STANDARD LIFE INVESTMENTS PROPERTY INCOME TRUST LIMITED (LSE: SLI)

Unaudited Net Asset Value as at 30 June 2013

Key Highlights

·      Net asset value per ordinary share was 58.3p as at 30 June 2013, an increase of 4.8% from 31 March 2013

·      Dividend yield of 7.3% based on share price of 62.0p (23 July 2013)

·      Cash held by the Company was £8.6m at 30 June 2013

·      Property purchased for £9.9m excluding costs during the quarter and property sold for £0.9m excluding costs

Net Asset Value ("NAV")

The unaudited net asset value per ordinary share of Standard Life Investments Property Income Trust Limited ("SLIPIT") at 30 June 2013 was 58.3 pence.  This is an increase of 4.8% over the net asset value of 55.6* pence per share at 31 March 2013.  The net asset value is calculated under International Financial Reporting Standards ("IFRS").

The net asset value incorporates the external portfolio valuation by Jones Lang LaSalle at 30 June 2013. The property portfolio will next be valued by the external valuer during September 2013 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 NAV per share calculated under IFRS over the period 31 March 2013 to 30 June 2013.

	£m	Pence per share	% of opening NAV
Unaudited Net Asset Value at 31 March 2013 *	80.6	55.6	-
Gain - realised and unrealised following revaluation of property portfolio (including the effect of gearing)	1.7	1.1	2.0%
Purchase costs Decrease in unrealised interest rate swap valuations	(0.5) 3.4	(0.3) 2.2	(0.6)% 4.0%
Other movement in reserves	(0.6)	(0.3)	(0.6)%
New shares issued	3.6	-	-
Unaudited Net Asset Value at 30 June 2013	88.2	58.3	4.8%

European Public Real Estate Association ("EPRA")**	30 Jun 2013	31 Mar 2013
EPRA Net Asset Value	£91.3m	£87.1m
EPRA Net Asset Value per share *	60.3p	60.1p

The Net Asset Value at 30 June 2013 is based on 151,374,919 shares of 1p each.

* The announcement of the Net Asset Value at 31 March 2013 included a provision for payment of an interim dividend of 1.133p per ordinary share for the quarter; this has been excluded from the above table to provide consistency with the Company's peer group NAV calculations and will be deducted from the NAV when the dividend goes ex-dividend.

** The EPRA net asset value measure is to highlight the fair value of net assets on an on going, long-term basis. Assets and liabilities that are not expected to crystallise in normal circumstances, such as the fair value of financial derivatives, are therefore excluded.

Investment Manager Commentary

At the end of the quarter the company completed on the purchase of Hertford House, Rickmansworth. The purchase was for £9.85m, at a yield of 11.1%, and an annual rent of £1.15m. The property is let for a further nine years to Trebor Bassett.

The Company also undertook two sales, one just after the quarter end.  The first was of a small vacant warehouse unit to an owner occupier for £0.9m, and the second, just after the quarter end, was the sale of its holding at Aberdeen Gateway Business Park for £14.77m. The company funded the development of this office and industrial complex in 2010 off a yield of 8.4% at a total cost of £11.47m. The property was let to Hydrasun and generated a rent of £1.0m per annum. The sale price was 3% above the March quarter valuation. This sale continues our belief in crystallising profit on assets that have served their purpose for the company, so that we can reinvest in new assets to the benefit of the revenue account. We developed the Hydrasun facility in 2010 before other parties were prepared to commit to development fundings and it has performed very well for us. However, we believe the time is now right to capitalise on the very strong demand for Aberdeen property so that we can reinvest in other growth opportunities. We are currently looking at a number of investments opportunities.

At the quarter end voids stood at 10.4%, down from 12.2% at the end of Q1. This is still too high, however we have two lettings in solicitors hands that will reduce this figure further and interest has been expressed in our largest empty property, which is subject to refurbishment.

During the latter part of the quarter there was a noticeable change in sentiment in the market, with a pick up in interest in both direct real estate and also in the sector. As a result the company issued £3.6m shares during the quarter and has now used up all its allocation under its 10% tap facility.

Cash position

As at 30 June 2013 the Company had borrowings of £84.4m and a cash position of £8.6m (excluding rent deposits) therefore cash as a percentage of debt was 10.2%.

Dividend

The Company intends to declare an interim dividend, in respect of the period from 1 April to 30 June 2013, of 1.133p per Ordinary Share, with ex-dividend and payment dates of 8 August and 24 August 2013 respectively.

Loan to value and interest rate

As at 30 June 2013 the loan to value ratio (assuming all cash is placed with RBS as an offset to the loan balance) was 44.8% (31 March 2013: 43.7%).  The covenant level is 65%. The Company has a weighted average interest rate of 6.3%, of which 100% is fixed with a maturity to December 2018. From 1 January 2014 the weighted average interest rate will fall to 3.8%. The interest rate swaps had a positive impact on the NAV of 2.2p per share or 4.0% over the quarter, and the fair value liability is £3.1m as at 30 June 2013. The Company has one interest rate hedge maturing in December 2013 with a current liability of £1.6m (31 March 2013: £2.5m). This liability will have fallen to zero by maturity in December 2013. The other interest rate hedges mature in December 2018, and have a current liability of £1.5m (31 March: £4.0m).

Net Asset analysis as at 30 June 2013 (unaudited)

	£m	%
Office	90.0	102.1
Retail	35.0	39.7
Industrial	44.3	50.2
Total Property Portfolio	169.3	192.0
Adjustment for lease incentives	(3.6)	(4.1)
Fair value of Property Portfolio	165.7	187.9
Cash	8.6	9.8
Other Assets	5.4	6.1
Non-current liabilities	(86.9)	(98.6)
Current liabilities	(4.6)	(5.2)
Total Net Assets	88.2	100.0

Breakdown in valuation movements over the period 1 Apr 2013 to 30 Jun 2013

	Exposure as at 30 Jun 2013 (%)	Capital Value Movement on Standing Portfolio (%)	£m
External Valuation at 31/03/2013			158.7
Sub Sector Analysis:
RETAIL
South East Retail	6.0	0.5	0.0
Retail Warehouses	14.7	(5.3)	(1.4)
OFFICES
Central London Offices	11.1	13.2	2.2
South East Offices	19.0	(2.3)	9.3
Rest of UK Offices	23.0	0.5	0.2
INDUSTRIAL
South East Industrial	4.3	0.0	0.0
Rest of UK Industrial	21.9	3.4	0.3
External Valuation at 30/06/2013	100	0.8	169.3

Top 10 Assets

Asset	Weighting 30 Jun 2013
Aberdeen Gateway Business Park*	8.6%
Tesco Distribution, Bolton	7.9%
White Bear Yard, London	6.6%
Hollywood Green, London	6.0%
Hertford Place, Rickmansworth	5.8%
St. James's House, Cheltenham	5.2%
Ocean Trade Centre, Aberdeen	5.0%
Clough Road Retail Park, Hull	4.7%
New Palace Place, Monck St, London	4.5%
Fleming Way, Crawley	3.6%
Total	57.9%

*Sold in July 2013.

The sale of the Aberdeen property mentioned above has been reflected in the 30 June Net Asset Value as an asset held for sale.

The Board is not aware of any further significant events or transactions which have occurred between 30 June 2013 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Details of the Company may also be found on the Investment Manager's website which can be found at : www.standardlifeinvestments.com/its

For further information:-

Jason Baggaley - Real Estate Fund Manager Standard Life Investments

Tel [phone] or [e-mail]

Gordon Humphries - Head of Investment Companies Standard Life Investments

Tel [phone] or [e-mail]

The Company Secretary

Northern Trust International Fund Administration Services (Guernsey) Ltd

Trafalgar Court

Les Banques

St Peter Port

GY1 3QL

Tel: [phone]

Fax: [phone]

 

 

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