Unaudited Net Asset Value

RNS Number : 4111V

Standard Life Invs Property Inc Tst

28 October 2014

 



28 October 2014

 

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

Unaudited Net Asset Value as at 30 September 2014

Key Highlights

·      Net asset value per ordinary share was 71.9p as at 30 September 2014 which includes an adjustment for the Q3 dividend payment due to be paid in November 2014. This is an increase of 3.6% from 30 June 2014.

·      Successful subscription of 50m ordinary shares at 72.9p per share in relation to the prospectus published on 1 July 2014 and an additional 7m ordinary shares were also issued on 25 September 2014 at 76.0p per share, raising gross proceeds of approximately £41.8m.

·      Dividend yield of 6.0% based on share price of 76.8p (24 October 2014).

·      Four industrial properties purchased for £41.9m 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 September 2014 was 71.9 pence including the adjustment of the Q3 dividend payment due in November 2014. This is an increase of 3.6% over the net asset value of 69.4 pence (including the adjustment for the Q2 dividend) per share at 30 June 2014. 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 September 2014. The property portfolio will next be valued by the external valuer during December 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 30 June 2014 to 30 September 2014.

	£m	Pence per share	% of opening NAV
Unaudited Net Asset Value at 30 June 2014	113.4	70.6	-
Gain - realised and unrealised following revaluation of property portfolio (including the effect of gearing)	5.6	2.9	4.1%
Increase in unrealised interest rate swap liability Other movement in reserves	(0.7) (0.2)	(0.3) (0.1)	(0.4%) (0.1%)
Increase in share capital	41.0
Unaudited Net Asset Value at 30 September 2014 before
adjustment for dividend	159.1	73.1	3.6%
Adjustment for Q3 dividend	(2.5)	(1.2)
Unaudited Net Asset Value at 30 September 2014 after
adjustment for dividend	156.6	71.9

European Public Real Estate Association ("EPRA")*	30 Sept 2014	30 June 2014
EPRA Net Asset Value before adjustment for dividend	£160.0m	£113.6m
EPRA Net Asset Value after adjustment for dividend	£157.5m	£111.7m
EPRA Net Asset Value per share before adjustment for dividend	73.5p	70.7p
EPRA Net Asset Value per share after adjustment for dividend	72.3p	69.5p

The Net Asset Value per share is calculated using 217,709,237 shares of 1p each being the number in issue on 30 September 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

Q3 was dominated by the equity raise at a 5% premium to the end June NAV and subsequent investment into four industrial / logistics units. The investments were made at a yield of 7% and give the Company an increased exposure to the sector as well as increasing the average unexpired lease term of the overall portfolio to 6 years. The purchase of a mixed use retail and leisure investment for £10.5m (a yield of 7%) is in solicitors hands and the Company hopes to complete this shortly.

The investment of £41.9m had an impact on the total return due to the cost of investment. The standing portfolio had a capital return after capex of 4.1%, giving a total return over the quarter of 6.0% for the standing portfolio, against 4.5% for the whole portfolio including acquisition costs, and 4.7% for the  IPD monthly index total return.

On 20 October 2014 shareholders approved a further issue of 50m ordinary shares. The Company hopes to issue these shares over the coming months subject to demand in the light of the Company's attractive property pipeline.

During the quarter the Company also exchanged contracts on the sale of an office for £3.5m but completion is delayed until December 2015 during which time the Company will continue to receive the rent. We also completed four lease renegotiations securing a rent of £587,000pa.

Cash position

As at 30 September 2014 the Company had borrowings of £84.4m and a cash position of £20.9m (excluding rent deposits) therefore cash as a percentage of debt was 24.8%.

Dividends

The Company paid an interim dividend in respect of the quarter ended 30 June 2014, of 1.161p per Ordinary Share, with ex-dividend and payment dates of 23 July 2014 and 22 August 2014 respectively.   

Loan to value and interest rate

As at 30 September 2014 the loan to value ratio (assuming all cash is placed with RBS as an offset to the loan balance) was 27.9% (30 June 2014: 34.2%). The covenant level is 65%. As a result of interest rate swaps the weighted average interest rate on the loan is fixed at 3.8% until the loan matures in December 2018.

The interest rate swaps had a negative impact on the NAV of 0.3p per share or 0.4% over the quarter, and the fair value liability was £0.9m as at 30 September 2014. The Company has two interest rate hedges which mature in December 2018, and have a current liability of £0.9m (30 June 2014: £0.2m).

Net Asset analysis as at 30 September 2014 (unaudited)

	£m	%
Office	109.8	69.0
Retail	36.2	22.8
Industrial	82.1	51.6
Total Property Portfolio	228.1	143.4
Adjustment for lease incentives	(1.4)	(0.9)
Fair value of Property Portfolio	226.7	142.5
Cash	20.9	13.1
Other Assets	3.6	2.3
Total Assets	251.2	157.9
Non-current liabilities	(84.9)	(53.4)
Current liabilities	(7.2)	(4.5)
Total Net Assets	159.1	100.0

Breakdown in valuation movements over the period 1 July 2014 to 30 Sep 2014

	Exposure as at 30 Sep 2014 (%)	Capital Value Movement on Standing Portfolio (%)	Capital Value Movement on Portfolio (£m)
External Valuation at 30 Jun 2014			178.8
Sub Sector Analysis:
RETAIL
South East Retail	4.9	1.4	0.2
Retail Warehouses	11.0	2.4	0.6
OFFICES
Central London Offices	10.8	8.1	1.8
South East Offices	24.7	5.1	2.7
Rest of UK Offices	12.6	2.2	0.6
INDUSTRIAL
South East Industrial	4.0	2.8	0.2
Rest of UK Industrial	32.0	2.8	43.2*
External Valuation at 30 Sep 2014	100.0	4.1	228.1

*Due to purchase of industrial investments

Top 10 Properties

	Weighting         30 Sep 2014 (%)
Chester House, Farnborough	6.7
White Bear Yard, London	6.6
Symphony, Rotherham	6.4
Denby 242, Denby	5.7
Hertford Place, Rickmansworth	5.5
St James's House, Cheltenham	5.2
Hollywood Green, London	4.9
New Palace Place, London	4.1
Bourne House, Staines	4.1
Ocean Trade Centre, Aberdeen	4.0
Total	53.2

The Board is not aware of any further significant events or transactions which have occurred between 30 September 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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