Net Asset Value(s)

RNS Number : 4333F

Standard Life Invs Property Inc Tst

24 April 2014

 



24 April 2014

 

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

Unaudited Net Asset Value as at 31 March 2014

Key Highlights

·      Net asset value per ordinary share was 67.8p as at 31 March 2014, an increase of 3.5% from 31 December 2013. The NAV total return to investors over the quarter was 5.1%.

·      Dividend increase of 2.5% from Q1 2014.

·      Dividend yield of 6.2% based on share price of 74.8p (31 March 2014).

·      Purchase of industrial investment of two logistics units for £3.6m excluding costs.

Net Asset Value ("NAV")

The unaudited net asset value per ordinary share of Standard Life Investments Property Income Trust Limited ("SLIPIT") at 31 March 2014 was 67.8 pence.  This is an increase of 3.5% over the net asset value of 65.5 pence per share at 31 December 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 31 March 2014. The property portfolio will next be valued by the external valuer during June 2014 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 December 2013 to 31 March 2014.

	£m	Pence per share	% of opening NAV
Unaudited Net Asset Value at 31 December 2013	101.6	65.5	-
Gain - realised and unrealised following revaluation of property portfolio (including the effect of gearing)	3.2	2.2	3.4%
Increase in unrealised interest rate swap liability Other movement in reserves	(0.6) 0.6	(0.3) 0.4	(0.5%) 0.6%
New shares issued	4.1	-	-
Unaudited Net Asset Value at 31 March 2014	108.9	67.8	3.5%

European Public Real Estate Association ("EPRA")*	31 Mar 2014	31 Dec 2013
EPRA Net Asset Value	£109.5m	£101.6m
EPRA Net Asset Value per share	68.1p	65.5p

The Net Asset Value per share is calculated using 160,709,237 shares of 1p each being the number in issue on 31 March 2014.

* 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

The UK real estate investment market remained robust in Q1, driven primarily by a weight of money coming into the sector. Capital values continued to rise, with the IPD monthly index showing a capital value increase of 2.3% over the quarter, and a total return of 3.9%.  Over the same period, the Company produced a NAV total return of 5.1% to investors and NAV growth of 3.5%, whilst its underlying investment portfolio provided a total return of 3.9%, in line with the IPD monthly index. The portfolio's performance was impacted by one asset in particular; a retail warehouse in Wymondham, where all hope value was removed from the valuation following recent court evidence that ended the chance of gaining a food store consent. Terms had been agreed with Asda to take the store if planning could be resolved, although last year we let the unit to Poundstretcher to mitigate downside risk.

The Company completed the purchase of an industrial investment in Livingston during the quarter for £3.6m, a yield of 10.5%. The investment is let to two good tenants for a term just over 5 years. We also completed the agreement for lease on the Company's largest void, Bourne House Staines, and completed the letting of the fourth floor office suite in Cheltenham. As a result, at the end of Q1 voids stood at 2.1%.

Cash position

As at 31 March 2014 the Company had borrowings of £84.4m and a cash position of £12.4m (excluding rent deposits) therefore cash as a percentage of debt was 14.7%.

Dividends

The Company paid an interim dividend in respect of the quarter ended 31 December 2013, of 1.133p per Ordinary Share, with ex-dividend and payment dates of 5 February 2014 and 21 February 2014 respectively.   

The Company has announced an interim dividend in respect of the quarter ended 31 March 2014, of 1.161p per Ordinary Share, with ex-dividend and payment dates of 7 May 2014 and 23 May 2014 respectively. This represents an increase of 2.5% on the quarterly dividend.  

Loan to value and interest rate

As at 31 March 2014 the loan to value ratio (assuming all cash is placed with RBS as an offset to the loan balance) was 39.1% (31 December 2013: 40.9%).  The covenant level is 65%. The Company has a current weighted average interest rate of 3.8% to December 2018, of which 100% is fixed with a maturity to December 2018.

The interest rate swaps had a negative impact on the NAV of 0.3p per share or 0.5% over the quarter, and the fair value liability was £0.6m as at 31 March 2014. The Company has two interest rate hedges which mature in December 2018, and have a current liability of £0.6m (31 December 2013: £0.1m).

Net Asset analysis as at 31 March 2014 (unaudited)

	£m	%
Office	84.3	77.4
Retail	47.3	43.4
Industrial	52.6	48.3
Total Property Portfolio	184.2	169.1
Adjustment for lease incentives	(3.5)	(3.2)
Fair value of Property Portfolio	180.7	165.9
Cash	12.4	11.4
Other Assets	5.6	5.2
Total Assets	198.7	182.5
Non-current liabilities	(84.5)	(77.6)
Current liabilities	(5.3)	(4.9)
Total Net Assets	108.9	100.0

Breakdown in valuation movements over the period 1 Jan 2014 to 31 Mar 2014

	Exposure as at 31 Mar 2014 (%)	Capital Value Movement on Standing Portfolio (%)	Capital Value Movement on Portfolio (£m)
External Valuation at 31 Dec 2013			176.4
Sub Sector Analysis:
RETAIL
South East Retail	5.9	1.7	0.2
Retail Warehouses	19.8	(3.1)	(1.2)
OFFICES
Central London Offices	12.0	3.0	0.7
South East Offices	19.0	4.3	1.5
Rest of UK Offices	14.8	9.2	2.3
INDUSTRIAL
South East Industrial	4.6	5.2	0.4
Rest of UK Industrial	23.9	0.6	3.9*
External Valuation at 31 Mar 2014	100.0	1.9	184.2

*Due to purchase of industrial investment

Top 10 Properties

	Weighting 31 Mar 2014
Tesco Distribution Unit, Bolton	7.9%
White Bear Yard, London	7.2%
Hertford Place, Rickmansworth	6.3%
St James's House, Cheltenham	6.1%
Hollywood Green, London	5.9%
Ocean Trade Centre, Aberdeen	5.0%
New Palace Place, London	4.8%
Clough Road Retail Park, Hull	4.3%
Explorer 1 & 2 & Mitre Court, Crawley	3.6%
Bathgate Retail Park, Bathgate	3.3%
Total	54.4%

The Board is not aware of any further significant events or transactions which have occurred between 31 March 2014 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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