Pre-close statement

RNS Number : 4729J

Quintain Estates & Development PLC

31 March 2010

 



31 March 2010

Quintain Estates & Development plc

("Quintain" / "Company" / "Group")

PRE-CLOSE STATEMENT

Quintain Estates & Development plc sets out below a trading update for the six months to 31 March 2010, ahead of the full year results announcement in June.

Fund Management

The programme to increase the number of income-producing beds within the iQ student accommodation fund is gaining momentum. Construction of the two Edinburgh schemes, comprising 635 beds in total, is on schedule to complete in time for the start of the next academic year in September. This month, we have also agreed heads of terms on a third London scheme that will add approximately 200 further beds to the portfolio in time for the start of the 2011 academic year, alongside the 255 beds being brought forward in the Hoxton scheme. Together, these four new schemes will deliver a 30% increase in income-generating beds by the start of the 2011/12 academic year in areas of the country with an acute shortage of appropriate accommodation. Further acquisitions are planned and potential targets have been identified.

Reflecting the increased appetite in the property sector for income-generating healthcare assets, £82.6m was raised by the Quercus Fund in February 2010 from existing investors at a premium of 5% to NAV to support further acquisitions. The completion of five purchases at a combined total of £26m is anticipated in April and further potential acquisitions have been identified.

Two disposals have been made from the Sequel Fund for a total consideration of £14.1m, reflecting a 20% premium to 30 September 2009 valuations. These comprised a 21,000 sq ft office building in Croydon where the lease had been re-geared and a distribution unit we built in 2007 in Redditch. The assets were sold in line with our strategy of active management and the recycling of capital in instances where exceptional value can be realised due to market fluctuations.

Regarding our science park fund, Quantum, it was announced this month that the 70,000 sq ft National Composites Centre (NCC), backed by Rolls Royce, Airbus, Agusta Westland, Vestas and GKN, will be located on our Bristol and Bath Science Park, alongside the 70,000 sq ft SPark One facility, both of which will open next year.

Urban Regeneration

The Government recently announced proposals for a London-Birmingham rail link, High Speed Two (HS2). Plans for HS2 are at a nascent stage and the range of possible outcomes is therefore wide. As presently conceived, the plans for the Birmingham terminal would impinge significantly on the City Park Gate site and have a material impact on the originally intended development. Whilst this still remains uncertain, we intend to take a prudent approach and make a provision of up to £8m on the current cost of £18m in the full year results for the twelve months to 31 March 2010. This will be a one-off item but as City Park Gate is held as a trading asset the impact will be seen in the profit and loss account. In the event that the HS2 plans are implemented, Quintain will consider alternative opportunities including the development around and above the proposed station, which is anticipated to attract millions of passengers every year. In the medium term, we will continue to focus on driving income from the site, which is expected to reach £453,000 per annum this summer.

At Wembley we continue to deliver good progress, most notably with substantial infrastructure work undertaken during the period on the Western Core in preparation for next phase of construction later this year. In February, we reached agreement with Wembley National Stadium Ltd regarding the control and management of parking on event days in a 125-year deal that will significantly enhance the experience for visitors and provide a substantial and robust income stream for Quintain. The period concluded with the granting of detailed planning consent for the 250,000 sq ft Brent Civic Centre at the heart of the scheme.

Investment Assets

Recognising the strong demand that continues to be driven by the ageing of academic institutions' own stock, the continued national and international demand for places at UK universities and the chronic shortage of appropriate accommodation for students, construction has now started on the 661-bed Corsham Street site in London, N1. This scheme is scheduled to complete in the summer of 2012.

In addition to the properties sold from the Sequel Fund at a premium to valuation, we have also disposed of an office building in Jersey from our own balance sheet for £8.2m, realising an uplift of 26% against the September 2009 valuation. We continue to monitor developments in the market to identify opportunities to unlock capital from selected assets where value has already been added.

Board

It is today confirmed that Tonianne Dwyer will step down from the Board and her position as Head of Fund Management on 16 April 2010 and that David Gavaghan will assume both roles on 10 May 2010.

For further information, please contact:

Quintain Estates & Development plc

Rebecca Worthington / Cressida Curtis

Tel:       [phone]

Financial Dynamics

Stephanie Highett / Dido Laurimore / Laurence Jones

Tel:       [phone]

 

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