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Tamar Eur Ind Fund (TEIF)

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Wednesday 14 November, 2012

Tamar Eur Ind Fund

Interim Management Statement

RNS Number : 1588R
Tamar European Industrial Fund Ltd
14 November 2012


14 November 2012



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


Interim Management Statement

and Announcement of Net Asset Value




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 July 2012 to 30 September 2012.  Unless otherwise specified, the IMS contains information that covers this period and up to the date of its publication.


Giles Weaver, Chairman, commented:

"The Board is pleased with the progress being made on the disposal of the Nordic assets with approximately 77% of the portfolio, by value, now sold.  We will continue to focus on marketing the remaining assets for disposal, with the benefit of our knowledge of the local markets, while mindful that market conditions in continental Europe have now started to impact on investor and lender views on secondary property in the region. 


"Overall, occupancy across our portfolio has improved to 86.76% by ERV largely through the sale of vacant buildings and improved tenant retention during the period. 

"While the Paris portfolio has proved resilient, markets elsewhere continue to be tough so we will continue to employ our intensive asset management approach in order to retain and generate value."


Net Asset Value

The Company's Net Asset Value ('NAV') at 30 September 2012, adjusted to add back deferred tax, was 63.2 pence per share.  This represents a decrease of 2.7% over the equivalent NAV at 30 June 2012.


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

Pence per share

Adjusted NAV at 30 June 2012


Movement in portfolio valuations


Movement from mark to market of derivatives


Foreign exchange movements

Dividend paid



Adjusted NAV at 30 September 2012



After deducting all deferred tax, whether recognised on the balance sheet or not, NAV at 30 September 2012 was 46.5 pence per share (48.2 pence at 30 June 2012).



Occupancy as at 30 September 2012 increased by 9.52% to 86.00% by area and by 3.14% to 86.76% by ERV.  Total new leases signed during the period represented 2.16% of the Fund's gross income (12,734 sqm of total area) and total tenants vacating represented 1.11% of the Fund's gross income (3,442 sqm). Tenants retained in the period represented 3.98% of the Fund's gross income (9,457 sqm).


During the period, the Fund sold one asset in Drammen, Norway, for a gross sale price of £15.65m (148.35m NOK), one asset at Coignières, France for £1.00m (€1.25m) and one asset in Einbeck, Germany, for £0.24m (€0.30m). These last two assets accounted for 39% of the Fund's total void space at the time of sale. 


The value of the portfolio as at 30 September 2012 (excluding the impact of acquisitions, disposals and exchange rate movements) decreased by 0.80% to £159.5m (€200.5m). The total number of assets held in the Fund's portfolio as at 30 September 2012 was 46.






Portfolio Summary


Geographical Analysis

The geographic spread by value of the Fund's portfolio at 30 September 2012 is:


                    % of Portfolio

















An interim dividend of 0.75 pence per share was announced in the quarter and paid on 28 September 2012.



As at 30 September 2012, the Fund had debt levels, representing gearing, on its total property value of 54.3%.  If all free cash balances within the Fund were to be applied to reduce the drawn debt facilities it would reduce gearing to 41.6%.   The loan to value covenants on the Company's banking facilities currently range from 70% to 90%.


The Company has interest rate swaps and caps in place for 95% of its drawn debt for a weighted average period of 1.55 years. The blended cost of money based on debt drawn at the quarter end is 3.95% (5.97% including margin). 


As a result of property sales and regular amortisation, debt totalling £13.8m was repaid in the period.


Market Review

Total commercial real estate investment in Europe totalled £22.6bn in the third quarter, showing a strong increase on the second quarter but at a similar level to the quarter before and on par with the quarterly averages over the last two years (source: CBRE).

Jones Lang LaSalle (JLL) European prime warehousing yield index was stable at 7.5% for the second consecutive quarter and prime light industrial yields also remained unchanged.

The UK recorded its largest quarterly amount of investment volumes since Q4 2010 and France and Germany recorded volumes close to their recent historical averages.  In all instances, and as reported now for some time, the majority of transactions have occurred in the prime sector, although there is liquidity in the good secondary segment of the market.


Local occupier markets are weak as a result of the continuing economic slowdown.  However, some markets are performing better than others and rental levels have generally kept stable with incentives pushing out slightly.  The lack of development over the past four years, apart from turn key projects, has at least meant a dearth of new supply which has supported demand for secondary stock.

The JLL weighted prime warehousing rental index contracted 0.4% over the quarter.


The Fund continues to target the renewal of leases and new lettings in a challenging economic environment coupled with the divestment of the remaining Nordic assets.



For further information:


Rob Brook, Tamar Financial Services Limited

Tel: +44 (0)20 3178 7750


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

Tel: +44 (0)20 7831 3113 

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