Valuation and Trading Update and Disposal

RNS Number : 6589D

Circle Property PLC

11 October 2018

 

11 October 2018

Circle Property Plc

("Circle" or the "Company")

Valuation and Trading Update and Disposal

Circle Property Plc, the specialist regional UK office investment and development company, provides the following update on trading ahead of its interim results for the six months ended 30 September 2018, which will be announced in November 2018.

Portfolio valuation

The Company's continued focus on the active management of its regional office assets, particularly the leasing of space in its redevelopment and refurbishment pipeline, has delivered strong growth in the value of its portfolio of assets during the first half of the year. As at 30 September 2018 the independent valuation of the Company's portfolio was £124.875 million, up 12.37% on a like-for-like basis over a six month period since 31 March 2018 (£111.125 million). The Company estimates an unaudited NAV of £78.7 million (£2.78 per share) as at 30 September 2018, which represents an 87% growth in NAV since IPO in February 2016.

Highlights include:

·    A total of £677,276 has been added to the contracted rental income resulting in a 9.9% increase to £7.506 million (31 March 2018: £6.829 million).

·    Construction on the Company's current redevelopment and refurbishment pipeline is now complete with good interest from potential tenants.

·    Completion of the acquisition of 710 & 720 Aztec West Business Park in April 2018 for £4.2 million in an off-market transaction representing a net initial yield of 7.9%. These offices, which are fully let, add to the Company's income and its holdings within Bristol's premier business park, where it already owns No. 135, a fully leased 13,258 sq ft office.  Rental growth across the wider Aztec West Business Park has been positive and the Company expects to capture this uplift at the imminent rent review and lease renewal for two of its existing properties on the same site.

·    Completion of a 15 year lease with BE Offices at Somerset House in Birmingham, at a contracted rent of £795,729 p.a. agreed within five weeks of the development's completion and taking the asset to 100% occupancy level.

·    The successful conclusion of a lease renegotiation with a major tenant at Kents Hill Business Park in Milton Keynes including the removal of two break clauses at years 15 and 20 in its lease which has 23 years remaining before expiry and is now RPI linked.

Disposal

The Company also announces that simultaneous to agreeing a lease re-gear with the tenant, it has completed the disposal of a non-core asset on the A303 at Solstice Park in Amesbury, Wiltshire for £3.5 million, representing an 18.6% premium to book value. Circle acquired the roadside site in 2005, before developing it into a petrol filling station and convenience store let to Co-operative Group Food Ltd. The proceeds of the sale will be reinvested into the Company's refurbishment and acquisition pipeline.

John Arnold, CEO of Circle Property Plc, commented: "Our careful stock selection and active asset management strategy continues to yield results as we report another significant uplift in our portfolio's valuation at the half year. The regional office markets in which we operate remain buoyant and we continue to be focused on growing the Company, expanding the share register and seeking new acquisition opportunities where we can apply our active asset management expertise to unlock value for our shareholders.

Furthermore, the sale at Solstice Park will enable us to recycle capital from a non-core, ex-growth asset into higher yielding investment opportunities in strong regional office markets, in line with our strategy."

ENDS

This announcement is inside information for the purposes of Article 7 of EU Regulation 596/2014.

Circle Property Plc	[phone]
John Arnold, CEO Edward Olins, COO
Smith & Williamson	[phone]
Azhic Basirov Katy Birkin Radnor Capital Joshua Cryer Iain Daly	[phone]
FTI Consulting	[phone]
Giles Barrie Richard Sunderland Eve Kirmatzis

 

END

 

 

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