AXA Property Trust Net Asset Value 30 September 2016 (Unaudited)
November 29 2016 - 10:21AM
UK Regulatory
TIDMAPT
To: Company Announcements
Date: 29 November 2016
Company: AXA Property Trust Limited
Subject: Net Asset Value 30 September 2016 (Unaudited)
SUMMARY
CAPITAL REDEMPTIONS
* No capital was returned to shareholders during the quarter. Under the terms
of the extension of the debt facility, disposal proceeds and rents will be
allocated to repay the debt in priority to shareholder distribution.
QUARTERLY RESULTS
* Net Asset Value ("NAV") as at 30 September 2016 was 71.40 pence per share,
an increase of 6.3% compared to the prior quarter (30 June 2016: 67.20
pence per share).
* In the three months to 30 September 2016, the Group made a net profit after
tax of GBP0.43m.
* The closing share price was 56.63 pence per share at 30 September 2016.
Compared to the Net Asset Value per share at 30 September 2016, this
represents a discount of 14.77 pence (-20.7%).
MANAGED WIND-DOWN STATUS
* The disposal strategy continues with the marketing of the Trust's remaining
assets.
* Post-quarter the Company, together with its joint venture partner,
completed the sale of the property at Agnadello, Italy. The sales price of
EUR23.2 million (at joint-venture level) reflects a discount of 1.3% below
the asset's independent valuation as at 30 September 2016.
* At Rothenburg, marketing continued and second-round bids were received
during the quarter. A preferred bidder was selected and exclusivity was
granted for the bidder to complete detailed due diligence. Post-quarter
negotiations are being finalised with the aim of contracting for a sale by
the end of December 2016, in which case completion is expected in early
2017.
* The remaining asset at Curno remains available for sale but interest has
been limited despite the asset's resilient cashflow.
PORTFOLIO UPDATE
Country Allocation at 30 September 2016 (by asset value)
Country % of portfolio
Germany 46%
Italy 54%
Sector Allocation at 30 September 2016 (by asset value)
Sector % of portfolio
Retail 46%
Industrial 24%
Leisure 30%
MARKET UPDATE
Eurozone - Economic environment
Eurozone GDP grew by 0.3% in Q2 2016, whilst growth in the first quarter was
revised down slightly, to 0.5% (from 0.6%). The more subdued data reflects a
slowdown in consumer spending, which has been the key driver of growth for much
of the last eighteen months, as the oil boost fades. Investment has also
remained lacklustre due to weak global trade and political uncertainty across
Europe. Among major Eurozone economies, Spain remains a strong performer with
GDP growth of 0.7% in Q2, followed by Germany (0.4%) but the divergence in
growth among eurozone countries is a sign of concern, with growth flattening in
Italy (0%) and faltering in France (-0.1%).
Political uncertainty - as we approach the Italian referendum in December and
elections in the Netherlands, France and Germany in 2017 - continues to add
some caution to spending by households and businesses. Political uncertainty
also remains on-going in the wake of the UK's vote to leave the EU. With
respect to economic growth, the medium term effect is highly dependent upon
future agreements between UK and EU countries, the outcomes of which are
difficult to characterize at this stage. It has also added to political and
financial risks across Europe, namely the stability of the Italian banking
system.
The indicators so far received for Q3 point to more lacklustre growth in the
second half of the year. Although PMIs have held up reasonably well, national
survey data, as well as consumer confidence surveys, suggest a slowing in
activity through July and August.
The German economy saw GDP grow by 0.4% Quarter on quarter (QoQ) in Q2,
following a 0.7% increase in Q1, above consensus. Surprisingly weak imports and
robust exports supported external trade balances. Private consumption increased
by 0.2% QoQ, while government consumption grew by 0.6%. Investment fell sharply
(-1.5% QoQ), mainly led by weakened investment in equipment, but supportive
credit conditions and rising demand should result in a continuation of the
previously commenced recovery in investment. Household consumption and
industrial production should furthermore remain resilient and provide the main
support for growth in Q3 2016.
Italy's GDP recorded positive growth in Q1 (0.3% QoQ), before flattening in Q2.
Whilst this growth remains subdued, and Italy continues to lag the rest of
Europe, the data does at least confirm a return to growth for the Italian
economy after three consecutive years of decline. Italy's economy faces some
severe headwinds and growth is likely to be further tested in the coming
quarters. For sustained economic growth to manifest, structural reform is
necessary within Italy. PM Renzi has backed a referendum on constitutional
reform, taking place in December 2016, but the outcome of this is not certain.
A period of uncertainty and a further delay in the implementation of crucial
reforms would most likely dampen perspective economic growth. The fragility of
the banking system is also adding to market jitters in Italy as a high stock of
NPLs on Italian banks' balance sheets may require a bail-in of retail
investors.
Italian Industrial Market
Take-up increased quarter-on-quarter both in Milan and Rome, generating volumes
of according to CBRE 91,200 sqm in Q3 2016, which is significantly more than
the respective 86,000 sqm observed in Q1 and Q2 together. According to CBRE,
prime rents continued to be stable year-on-year and quarter-on-quarter in both
Milan and in Rome standing at EUR50/sqm/year and EUR52/sqm/year respectively.
According to CBRE, year-to-date, industrial investment volumes amount to EUR231m,
down 22.6% compared to the same period in 2015. According to CBRE, prime net
yields fell however by 15 bps during Q3 both in Milan and Rome, reaching 6.25%.
German Retail Market
Q3 2016 saw 114,000 sqm of retail space signed, an increase of 10% compared by
Q2 2016. The majority (57%) of all rental contracts were signed by
international retailers. Berlin, Dusseldorf, Frankfurt, Hamburg, Hannover,
Cologne, Leipzig, Munich, Nuremberg and Stuttgart jointly generated 35% of the
overall take-up, down from 39% compared to Q2 2016. German prime retail rents
have, according to JLL, continued to be largely stable with only Berlin
recording some upward movement in prime rents. Overall retail investment
volumes amounted to approximately EUR3.95bn in Q3 2016 according to CBRE, up from
EUR2.9bn seen in Q2 2016, but down from EUR4.7bn in Q3 2015. According to JLL,
prime high street yields are a peak prime level of 3.30% (Munich). Prime yields
for shopping centres remained stable at 4.1%, according to CBRE.
CONSOLIDATED PERFORMANCE SUMMARY
Audited Unaudited
3 months ended 3 months ended
30 June 2016 30 September Quarterly
2016 Movement
Pence per share Pence per share Pence per share /
(%)
Net Asset Value per share 67.20 71.40 4.20 6.24%
Share price (mid market) 55.13 56.63 1.50 2.72%
Share price discount to Net 18.0% 20.7% 2.7 percentage
Asset Value points
Total Return per Share Audited Unaudited
12 month ended 12 month ended
30 June 2015 30 September
2016
Net Asset Value Total Return 11.2% 14.7%
Share Price Total Return
- AXA Property Trust 29.6% 16.5%
- FTSE All Share Index 2.2% 16.8%
- FTSE Real Estate Investment -8.3% -8.8%
Trust Index
Source: AXA Investment Managers UK Limited and Stifel Nicolaus
Europe Limited.
Audited Unaudited
3 months ended 3 months ended
30 June 2016 30 September
2016
GBPmillion GBPmillion
Net property income 0.88 0.83
Net foreign exchange (losses) / 1.69 0.08
gains
Investment Manager's fees (0.29) (0.05)
Other income and expenses 0.34 (0.39)
Net finance costs (0.07) (0.11)
Revenue loss 2.55 0.37
Unrealised / gains on (0.18) 0.01
revaluation of investment
properties
Net gain on disposal of (1.40) -
investment properties
Net gains on derivatives (0.01) 0.07
Share in losses of Joint (0.11) 0.08
Venture
Finance costs (0.37) -
Net foreign exchange losses - (0.02)
Deferred tax (0.20) (0.07)
Impairment loss (0.45) 0.00
Capital profit (2.72) 0.07
Total profit (0.17) 0.43
NET ASSET VALUE
Audited Unaudited
12 months ended 3 months ended
30 June 2016 30 September
2016
GBPmillion GBPmillion
Opening Net Asset Value 49.37 38.69
Net (loss) / profit after tax 1.41 0.43
Unrealised movement on 0.76 -
derivatives
Share Redemption (16.19) -
Foreign exchange translation 3.35 1.99
losses
Closing Net Asset Value 38.69 41.11
Net Asset Value per share as at 30 September 2016 was 71.40 pence (67.20 pence
as at 30 June 2016).
The Net Asset Value attributable to the Ordinary Shares is calculated under
International Financial Reporting Standards. It includes all current year
income after the deduction of dividends and capital redemptions paid prior to
30 September 2016.
SHARE PRICE AND DISCOUNT TO NET ASSET VALUE
The closing share price was 56.63 pence per share at 30 September 2016.
Compared to the Net Asset Value per share at 30 September 2016, this represents
a discount of 14.77 pence (-20.7%).
FUND GEARING
During the quarter and following the sale of the asset in Dasing EUR6.48 million
of debt was repaid. The outstanding debt reduced to GBP9.93 million (EUR11.48
million) as at end of September 2016.
Audited Unaudited
30 June 2016 30 September Movement
2016
GBPmillion /% GBPmillion /% GBPmillion /%
Property portfolio * 46.79 42.35 -4.44 10.5%
Borrowings 15.02 9.93 -5.09 51.2%
Total gross gearing 32.1% 23.5% -8.6 percentage
points
Total net gearing ** 26.6% 10.0% -16.6 percentage
points
* Value based on independent valuation, Agnadello
valuation included
** Net Gearing is calculated as overall debt, net of unallocated cash
held by the Goup over the portfolio at fair value
Fund gearing is included to provide an indication of the overall indebtedness
of the Company and does not relate to any covenant terms in the Company's loan
facilities.
Gross gearing is calculated as debt over property portfolio at fair value. Net
gearing is calculated as debt less cash (cash held in JV included) over
property portfolio at fair value.
Following the post-quarter disposal of the Agnadello asset, the net disposal
proceeds together with the existing cash reserves will be allocated to the full
reimbursement of the outstanding loan.
CASH POSITION
The Company and its subsidiaries held total cash of GBP10.02 million (including
cash held in Joint Venture) at 30 September 2016.
MATERIAL EVENTS
Except for those noted above, the Board of the Company is not aware of any
significant event or transaction occurring between 30 September 2016 and the
date of the publication of this Statement which would have a material impact on
the financial position of the Company.
Company website:
http://www.axapropertytrust.com
All Enquiries:
Investment Manager
AXA Investment Managers UK Limited
Broker Services
7 Newgate Street
London EC1A 7NX
Tel: +44 (0)20 7003 2345
Email: broker.services@axa-im.com
Broker
Stifel Nicolaus Europe Limited
150 Cheapside
London EC2V 6ET
Neil Winward / Mark Bloomfield
Tel: +44 (0)20 7710 7600
Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
GY1 3QL
Tel: +44 (0)1481 745324
END
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