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Tamar Eur Ind Fund (TEIF)

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Monday 19 May, 2014

Tamar Eur Ind Fund

Interim Management Statement and NAV

RNS Number : 5121H
Tamar European Industrial Fund Ltd
19 May 2014
 



 

19 May 2014

 

 

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

 

Interim Management Statement

and Announcement of Net Asset Value

 

TEIF ACHIEVES FURTHER PROGRESS ON ASSET MANAGEMENT INITIATIVES AHEAD OF 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 2014 to 31 March 2014.  Unless otherwise specified, the IMS contains information that covers this period and up to the date of its publication.

 

Giles Weaver, Chairman, commented:

 

"Whilst no disposals were completed during the quarter, the Fund completed the sale of two Belgian assets post quarter end for £12.36m.  A further asset is under offer in Belgium, and contracts have been signed on the larger of the remaining two Nordic assets post quarter end with completion due shortly.  Progress is being made on further sales as the fund seeks to take advantage of increasing liquidity in the secondary real estate sector.  

 

"The intention of the Company remains to make a distribution to shareholders in the coming months, when appropriate, and further updates to shareholders will be provided on this in due course."

 

 

Net Asset Value

The Company's Net Asset Value ('NAV') at 31 March 2014, adjusted to add back deferred tax, was 54.9 pence per share.  This represents a decrease of 6.0% over the equivalent NAV at 31 December 2013.

 

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


Pence per share

Adjusted NAV at 31 December 2013

58.4

Movement in portfolio valuations

(3.1)

Movement from balance of retained profits

0.1

Movement from mark to market of derivatives

0.1

Dividend paid

-

Foreign exchange movements

(0.6)

Adjusted NAV at 31 March 2013

54.9

 

After deducting all deferred tax, whether recognised on the balance sheet or not, NAV at 31 March 2014 was 42.8 pence per share (45.7 pence at 31 Dec 2013).

 

Portfolio

The occupational markets continue to be challenging and the Fund's occupancy level by ERV fell from 83.14% to 81.66% over the quarter or from 79.11% to 76.76% by area.  The fall was principally caused by the departure of the tenant that leased the full 13,986 sqm of space at our  Dutch asset, however new leases for 6,388 sqm have been signed or are in the process of being signed currently on this asset.

 

Total new leases signed during the period represented 1.28% of the Fund's gross income (5,771 sqm of total area) and total tenants vacating represented 6.86% of the Fund's gross income (15,300 sqm). Offsetting this, tenants retained in the period through lease renewals represented 9.14% of the Fund's gross income (19,958 sqm).

 

The value of the portfolio as at 31 March 2014 (excluding the impact of acquisitions, disposals and exchange rate movements) decreased over the quarter by 2.9% to £133.7 million (€161.7 million) primarily due to the negative impact of the decreasing occupancy rate and the continuing soft occupational markets. The total number of assets held in the Fund's portfolio as at 31 March 2014 was 39.

 

 

 

 

 

Portfolio Summary

 

Geographical Analysis

The geographic spread by value of the Fund's portfolio at 31 March 2014 is:

 


% of Portfolio

France

64%

Belgium

14%

Germany

13%

Sweden

7%

The Netherlands

2%



 

Dividend

An interim dividend of 0.75 pence per share was announced in the quarter and paid on 30 April 2014.

 

Financing

As at 31 March 2014, the Fund had debt levels, representing gearing, on its total property value of 55.5%.  If all free cash balances within the Fund were to be applied to reduce the drawn debt facilities it would reduce gearing to 40.3%.   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 the equivalent of £22.0m, representing 13% of debt drawn on a swaps basis and 29% once caps are included, for a weighted average period of 1.2 years. The blended cost of money based on debt drawn at the quarter end is 0.67% (6.37% including margin). 

 

The only amortisation during the quarter was from the regular contractual loan amortisation although with the sales post quarter, significant amortisation from net sales proceeds will be seen by the end of the next quarter.

 

Market Review

 

Commercial real estate investment in Europe totalled £32.2bn in the first quarter, showing a 21% gain on the fourth quarter of 2013 and the strongest first quarter since 2008.  Investment in the industrial sector accounted for 11% of the total, slightly higher than the 9% average seen over the last two years (source: CBRE).

 

In the Fund's main market, France, £2.89bn was invested during the quarter, with offices accounting for 80% of the year-to-date volume, retail 15% and industrial 5%.

 

The occupational markets in the industrial sector are still difficult, with the gradually improving economic situation yet to impact on demand.

 

Liquidity is returning to the secondary real estate investment markets and the focus for the Fund remains on tenant retention and re-letting in order to be able to take advantage of this improving liquidity.

 

-ENDS-

 

For further information:

 

Rob Brook, Patrizia Financial Services Limited

Tel: +44 (0)20 3747 6501

 

Stephanie Highett/Dido Laurimore/Nick Taylor FTI Consulting

Tel: +44 (0)20 3727 1000

 

www.tamareif.com 


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