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Tamar Eur Ind Fund (TEIF)

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Friday 17 May, 2013

Tamar Eur Ind Fund

Interim Management Statement & NAV

RNS Number : 0437F
Tamar European Industrial Fund Ltd
17 May 2013
 



 

17 May 2013

 

 

Tamar European Industrial Fund ("Company"/ "Fund'' / "Group")

 

Interim Management Statement

and Announcement of Net Asset Value

 

TAMAR CONTINUES TO PROGRESS ASSET MANAGEMENT INITIATIVES AND FINAL

NORDIC SALES

 

Tamar European Industrial Fund, a Guernsey registered closed-ended investment company focusing on industrial property assets in Western Europe, today announces its Interim Management Statement ('IMS') for the period from 1 January 2013 to 31 March 2013.  Unless otherwise specified, the IMS contains information that covers this period and up to the date of its publication.

 

Giles Weaver, Chairman, commented:

 

"The Fund now owns only four Nordic assets, one in Finland and three in Sweden, representing 17% by value, of the original Nordic portfolio. Once asset management initiatives have been completed, marketing of these assets will be undertaken. Whilst there are encouraging signs that the secondary real estate investment market is improving, stock selection continues to be stringent and occupancy levels and lease lengths are thus key to generating liquidity. However the Fund also continues to look at a wider disposals programme of non-Nordic assets in order to target a return of capital to shareholders as soon as possible."

 

"Occupational markets remain challenging and occupancy by area fell 2.90% in the first quarter, but this was primarily due to the departure of a significant tenant in Belgium following a strategic reorganisation.  However, sales of vacant units to owner occupiers continue with three units currently under offer and the Investment Manager continues to maximise retention levels through its strong tenant relationships."

 

"Discussions are ongoing with the bank with respect to the December 2013 loan extension."

 

 

Net Asset Value

The Company's Net Asset Value ('NAV') at 31 March 2013, adjusted to add back deferred tax, was 62.9 pence per share.  This represents an increase of 3.5% over the equivalent NAV at 31 December 2012.

 

The table below sets out the movement in the adjusted NAV in the quarter:


Pence per share

Adjusted NAV at 31 December 2012

60.8

Movement in portfolio valuations

-2.3

Movement from balance of retained profits

0.3

Movement from mark to market of derivatives

0.4

Foreign exchange movements

3.7

Adjusted NAV at 31 March 2013

62.9

 

After deducting all deferred tax, whether recognised on the balance sheet or not, NAV at 31 March 2013 was 48.2 pence per share (46.0 pence at 31 December 2012).

 

Portfolio

Occupancy by area as at 31 March 2013 decreased by 2.90% to 83.35% and by 1.61% to 86.48% by ERV. Total new leases signed during the period represented 1.34% of the Fund's gross income (4,092 sqm of total area) and total tenants vacating represented 3.46% of the Fund's gross income (11,864 sqm). Tenants retained in the period through lease renewals represented 6.45% of the Fund's gross income (16,506 sqm).

 

No sales were made during the quarter.

 

The value of the portfolio as at 31 March 2013 (excluding the impact of acquisitions, disposals and exchange rate movements) decreased over the quarter by 1.91% to £156.1 million (€184.9 million). The total number of assets held in the Fund's portfolio as at 31 March 2013 was 42.

 

Portfolio Summary

 

Geographical Analysis

The geographic spread by value of the Fund's portfolio at 31 March 2013 is:

 


% of Portfolio

France

58%

Belgium

18%

Germany

12%

Sweden

8%

The Netherlands

3%

Finland

1%

 

Dividend

An interim dividend of 0.75 pence per share was announced in the quarter and paid on 26 April 2012.

 

Financing

As at 31 March 2013, the Fund had debt levels, representing gearing, on its total property value of 56.2%.  If all free cash balances within the Fund were to be applied to reduce the drawn debt facilities it would reduce gearing to 41.7%.   The loan to value covenants on the Company's banking facilities currently range from 70% to 90% (averaging 75% based on debt drawn).

 

The Company has interest rate swaps and caps in place for 93% of its drawn debt for a weighted average period of 1.1 years. The blended cost of money based on debt drawn at the quarter end is 1.97% (6.00% including margin). 

 

As a result of regular amortisation, debt totalling £0.4m was repaid in the period.

 

Market Review

 

Total commercial real estate investment in Europe totalled £24.81bn in the first quarter, showing an 11% gain on the first quarter of 2012 (CBRE), with London, being the main beneficiary.

 

In the Fund's main market, France, £2.2bn was invested during the first quarter, with offices accounting for just over half of this volume (a lower than average proportion), retail 42% and industrial only 7%.  Around 70% of the total volume was purchased by French investors.

 

The occupational markets remain generally muted in the context of low or no growth economies.  The Eurozone Manufacturing Purchasing Managers' index still points to a long recession in manufacturing, which is leading to continued occupier caution.  This resulted in a 21% overall fall in take-up quarter-on-quarter in Europe, with only Germany out of the markets which the Fund is invested in registering an increase.

 

The Fund continues to focus on active asset management as part of its strategy to increase income in ongoing challenging local markets whilst continuing to target the disposal of the final four Nordic assets post asset management initiatives.

 

-ENDS-

 

For further information:

 

Rob Brook, Tamar Financial Services Limited

Tel: +44 (0)20 3178 7752

 

Stephanie Highett/Dido Laurimore/Daniel O'Donnell, FTI Consulting

Tel: +44 (0)20 7831 3113

 

www.tamareif.com 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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