Interim Management Statement

RNS Number : 6183D

F&C Commercial Property Trust Ld

17 May 2012

 



F&C Commercial Property Trust Limited

Interim Management Statement

For the Period from 1 January 2012 to 17 May 2012

Investment Objective

The investment objective of the Company is to provide ordinary shareholders with an attractive level of income together with the potential for capital and income growth from investing in a diversified UK commercial property portfolio.

Performance Summary

Total Return	For the three month period ended 31 March 2012
Net asset value per share *	1.4%
Ordinary Share price	1.0%
Investment Property Databank All Quarterly and Monthly Valued Funds	0.8%
FTSE All-Share Index	6.1%

Capital Values	As at  31 March 2012	As at 31 December 2011	% Change
Net asset value per share *	100.5p	100.5p	-
Ordinary Share price	101.1p	101.6p	-0.5
Premium to net asset value *	0.6%	1.1%
Gearing * #	28.8%	29.3%
Net gearing * $	24.4%	25.4%

Sources: F&C Investment Business Limited, Investment Property Databank ('IPD'), Datastream.

*  Calculated under International Financial Reporting Standards ('IFRS'). Net asset value total return is calculated assuming dividends are re-invested

#  Gearing: Borrowings/total assets (less current liabilities)

$  Net gearing: (Borrowings - cash)/total assets (less current liabilities and cash)

Economic and Property Market Overview

UK commercial property delivered a total return of 0.8 per cent in the quarter ended March 2012, according to the IPD Quarterly Index, as the UK moved into a technical recession and concerns about problems in the Eurozone continued to affect market sentiment. Capital values fell by 0.7 per cent during the period, with weakness spreading from secondary and regional markets to some prime property and also to some assets in the South East. Rental growth was very patchy and largely confined to the London area. Income return was maintained in the quarter but given the economic outlook and market uncertainty, the need to secure the income stream has become even more critical, and prime property has continued to deliver out-performance. The quarter saw a number of high profile business failures affecting town centre retail property and shopping centre total returns were negative in the quarter. Central London has continued to out-perform with shops and offices in the West End proving relatively resilient. Investment activity moved lower in the period and was driven by overseas investment, often with a London focus; elsewhere the investment market was more subdued. The banks are reducing their exposure to property, with new lending constrained and signs that more bank instigated sales are occurring. Investors remain risk averse and the definition of prime is being drawn ever tighter.

Review of the First Quarter

As at 31 March 2012 the Company's portfolio was valued at £941.0 million (£932.5 million as at 31 December 2011). After allowing for capital expenditure and costs associated with property acquisitions, there was no movement in the valuation during the period.

The portfolio recorded a total return of 1.5 per cent over the quarter, compared with the IPD All Quarterly and Monthly Valued Funds total return of 0.8 per cent and over the period the portfolio was ranked on the 16^th percentile against 246 funds.

The strongest performing sub-sectors in the portfolio were West End London Offices, South East Retail and Industrials located in Rest of UK. The other sectors selectively experienced capitalisation rates moving out and in common with the wider market experienced some falls in values. On a total return basis, the portfolio's retail and industrial properties recorded the strongest performance.

The Company incurred capital expenditure of £7.97 million over the quarter and this related primarily to the development of the student accommodation blocks at Winchester, the refurbishment of offices at Watchmoor Park, Camberley and residual expenditure at 25 Great Pulteney Street, London W1. The scheme at Winchester, which is the Company's largest exposure to a development, remains both on budget and programme.

Void levels in the portfolio increased from 6.0 per cent to 7.3 per cent (excluding properties held for development). This increase was due to lease events occurring at Building B, Watchmoor Park, Camberley and at Thames Valley Park Two, Reading. Progress is being made on letting up the voids and there are a number of lettings currently in legals, but, as is symptomatic of this market, it is taking significant time and effort to negotiate and contract leases.

There were no sales or purchases over the period.

Dividends

Monthly interim dividends, in respect of the year ended 31 December 2011, each of 0.5 pence per share, were paid on 27 January, 24 February and 30 March 2012.

The twelfth, and last, interim dividend in respect of the year to 31 December 2011, of 0.5 pence per share, was paid on 27 April 2012 to shareholders on the register on 13 April 2012.

The Board has recently announced a first monthly interim dividend in respect of the year to 31 December 2012, of 0.5 pence per share, payable on 31 May 2012 to shareholders on the register on 18 May 2012.

It is the Board's intention that the Company will continue to pay dividends monthly.

Top Ten Holdings

Properties valued in excess of £100 million	Sector
London W1, St Christopher's Place Estate	Retail
Properties valued between £75 million and £100 million
Newbury, Newbury Retail Park	Retail Warehouse
Properties valued between £50 million and £75 million
London SW1, Cassini House, St James's Street	Offices
Solihull, Sears Retail Park	Retail Warehouse
London SW19, Wimbledon Broadway	Retail
Properties valued between £40 million and £50 million
London SW1, 84 Eccleston Square	Offices
Properties valued between £30 million and £40 million
Rochdale, Dane Street	Retail Warehouse
Uxbridge, 3 The Square, Stockley Park	Offices
London SW1, Charles House, 5-11 Regent Street	Offices
London W1, 25 Great Pulteney Street	Offices

Geographical Analysis

Location	31/03/2012 Percentage of portfolio		31/12/2011 Percentage of portfolio
London - West End	41.7		41.5
South East	25.5		25.3
Midlands	12.0		12.1
North West	10.6		10.7
Scotland	7.3		7.4
Eastern	1.9		2.0
Rest of London	1.0		1.0
Total	100.0		100.0

Sector Analysis

Sector	31/03/2012 Percentage of portfolio		31/12/2011 Percentage of portfolio
Offices	39.0		39.2
Retail	26.3		26.3
Retail Warehouse	20.4		20.6
Industrial	13.5		13.5
Other	0.8		0.4
Total	100.0		100.0

Issue of Shares

During the quarter to 31 March 2012 the Company issued 14.75 million Ordinary Shares, raising gross proceeds of £15.3 million.

Since the end of the quarter, the Company has issued a further 13.0 million Ordinary Shares, raising gross proceeds of £13.5 million.

The Company continues to find and pursue good investment opportunities. With its shares remaining at a premium to net asset value, issuing further new shares on a non pre-emptive basis under existing authorities allows the Company to take advantage of these opportunities and to invest in the existing portfolio.

Subsequent Events

Other than the issue of shares mentioned above, the Board is not aware of any significant events or transactions which have occurred since 31 March 2012 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Quarterly and Key Information

This statement and further information regarding the Company, including movements in the share price since the end of the period and the Group's most recent annual and interim reports, can be found at the Company's website www.fccpt.co.uk.

Enquiries:

Richard Kirby

F&C REIT Asset Management LLP

Tel: [phone]

Graeme Caton

Winterflood Securities Limited

Tel: [phone]

 

END

 

 

IMSFMGMKVNKGZZM