AXA Property Trust Net Asset Value 31 March 2016 (unaudited)
May 27 2016 - 8:49AM
UK Regulatory
TIDMAPT
To: Company Announcements
Date: 27 May 2016
Company: AXA Property Trust Limited
Subject: Net Asset Value 31 March 2016 (Unaudited)
SUMMARY
CAPITAL REDEMPTIONS
* The Company returned GBP11.0m to Shareholders by means of a capital
redemption on 6 January 2016 bringing the total return amount to GBP24.1
million.
QUARTERLY RESULTS
* The Company's unaudited Consolidated Net Asset Value as at 31 March 2016
was GBP38.55 million (31 December 2015: GBP47.14 million)
* The unaudited Net Asset Value per share at 31 March 2016 was 66.95 pence
(31 December 2015: 62.06 pence per share)
* The Company made a net profit after tax of GBP1.58 million in the nine months
period to 31 March 2016 and GBP0.27 million in the 3 months period from 1
January to 31 March 2016.
MANAGED WIND-DOWN STATUS
* The Company continues to progress the managed wind-down of its portfolio
with a view to realising its investments by December 2016 in a manner that
achieves a balance between maximising the value from the Company's
investments and making timely returns of capital to shareholders.
* The Company returned GBP11.0m to Shareholders by means of a capital
redemption on 6 January 2016 bringing the total return amount to GBP24.1
million
* No assets were sold during the quarter. As at the end of the quarter, all
assets, with the exception of Rothenburg were on the market available for
sale.
* The two Italian assets were marketed on a targeted, open market basis
during the quarter and whilst no bids were received, management remain
focussed on achieving successful sales during the year.
* In Germany the potential sale of the Dasing asset was delayed by the
proposed purchaser and is now targeted for mid-year. At Rothenberg,
negotiations with an anchor tenant continued towards finalising a new
long-term lease which is supportive of the value-creation at this asset.
Once the lease negotiation is signed, the asset will be placed in the
market.
PORTFOLIO UPDATE
Country Allocation at 31 March 2016 (by asset value)
Country % of portfolio
Germany 52%
Italy 48%
Sector Allocation at 31 March 2016 (by asset value)
Sector % of portfolio
Retail 39%
Industrial 34%
Leisure 27%
MARKET UPDATE
German Retail
During 2015 over 525,000 sq m of retail lettings were transacted, approximately
10% less than the previous year. Prime German retail rents remained stable
during the first quarter of 2016 and according to CBRE were largely unchanged
compared to the first quarter of 2015. Retail investment volumes amounted to EUR
1.5bn in the first quarter of 2016, down 56% Year-on Year (YoY), reducing the
share of retail investments relative to total real estate investment from 37%
in Q1 2015 to 18% in Q1 2016. This fall appears to reflect a lack of non-German
investors compared to previous years which itself may have been caused by the
lower volume of prime retail assets brought to the market.. Overall, portfolios
comprised the largest share of retail investment during the quarter, amounting
to EUR860 million (57%). In addition, the major share of retail transactions were
across generally secondary and tertiary locations, reflecting also the lack of
availability of core investments for sale. Yield compression has continued
across all types of locations and properties over the past 12 months. According
to Colliers' recent market indices, prime gross yields for retail-office
mixed-use assets in the 'Big 7' centres are currently in the order of 3.00% in
Munich rising to 4.20% in Cologne. Warehouse stores and retail parks are
currently priced at yields of between 5.50% and 6.00%.
German Logistics
During the first quarter of 2016, Germany benefited from a 45% YoY increase in
logistics and industrial take up, at 1.5m sq m. CBRE reports this as the
highest take-up figure for a first quarter and was driven by transactions
outside of the top 5 city markets. Of these major markets, Frankfurt recorded
the highest level of activity with take-up amounting to approximately 170,500
sq m. Generally, prime rents remained stable, although those in Munich and
Berlin each recorded increases of approximately 4%, amounting to EUR6.75/sq m and
EUR4.80/sq m respectively as at Q1 2016.
Investment volumes into German logistics and industrial properties during the
quarter amounted to EUR910m, almost twice the amount invested during Q1 2015.
According to Colliers, this sector accounted for 11% of the overall commercial
investment volume in Q1 2016, higher than the 7.2% achieved over the whole of
2015.This may reflect a desire by investors to maintain yield in a low-return
environment and a consequent switch away from other commercial sectors. As
with the leasing markets, a large majority (75%) of transactions occurred
outside of the top 7 markets. Colliers report gross initial yields declined by
50 basis points over the quarter, to 5.9%. The lowest prime level was
registered in Munich at 5.4%
Italian Industrial
The Italian industrial market is continuing to benefit from the country's
economic recovery and its central location along the European logistics
corridor. The north of Italy, in particular Lombardy and Emilia Romagna
continue to benefit from healthy industrial take-up. Q1 2016 prime rents grew
by 4.2% YoY in the Milan region , whilst remaining stable in Rome. Current
prime rents now stand at EUR52.00/sq m/year in Rome and at 50/sq m/year in Milan.
Investment into the Italian logistics sector amounted to a quarterly volume of
EUR30 million, down 65% YoY according to CBRE. Prime yields remaining unchanged
at 6.5% in both Milan and Rome, however CBRE comment that this is a 80bps
reduction from Q1 2015, reflecting sustained overall demand from international
investors.
CONSOLIDATED PERFORMANCE SUMMARY
Year to Year to
date date
31 December 31 March Quarterly
2015 2016 Movement
Pence per Pence per Pence per share /
share share (%)
Net Asset Value per share 62.06 66.95 4.89 7.88%
Share price (mid-market) 54.50 53.88 -0.62 -1.14%
Share price discount to Net 12.2% 19.5% 7.3 percentage
Asset Value points
Total Return per Share Unaudited Unaudited
12 months ended 12 months ended
31 March 2015 31 March 2016
Net Asset Value Total Return -5.4% 18.8%
Share Price Total Return
- AXA Property Trust 12.7% 32.0%
- FTSE All Share Index 6.6% -3.9%
- FTSE Real Estate Investment 28.3% -5.3%
Trust Index
Source: AXA Investment Managers UK Limited and Stifel Nicolaus
Europe Limited.
Total net profit GBP0.27 million (0.46 pence per share) for the three months from
1 January to 31 March 2016 analysed as follows:
Unaudited Unaudited
3 months ended 3 months ended
31 December 2015 31 March 2016
GBPmillion GBPmillion
Net property 0.87 0.35
income
Net foreign exchange (losses) / gains 0.00 0.00
Investment Manager's fees (0.08) (0.02)
Other income and (1.70) (0.14)
expenses
Net finance (0.28) (0.13)
costs
Revenue (loss)/profit (1.19) 0.06
Unrealised (losses) / gains on revaluation of 1.95 0.04
investment properties
Net losses on disposal of investment properties 1.06 0.02
Net (Losses) / gains on derivatives 0.19 0.12
Share in (losses) / Profit of Joint Venture 0.06 0.10
Finance costs (0.00) 0.00
Net foreign exchange losses 0.17 0.00
Deferred tax 0.05 (0.08)
Capital profit 3.49 0.21
Total profit 2.30 0.27
NET ASSET VALUE
The Company's unaudited Consolidated Net Asset Value decreased by GBP8.59 million
during the quarter mainly as a result of the GBP11.00 million of capital
redemption and a favourable movements in the Euro/Sterling exchange rate (GBP
2.09 million):
Unaudited Unaudited Unaudited
6 months ended 3 months ended 9 months ended
31 December 2015 31 December 2015 31 March 2016
GBPmillion GBPmillion GBPmillion
Opening Net Asset 49.37 47.14 49.37
Value
Net (loss) / profit after tax 1.31 0.27 1.58
Unrealised movement on 0.53 0.04 0.57
derivatives
Share Redemption (5.20) (11.00) (16.19)
Foreign exchange translation losses 1.14 2.09 3.23
Closing Net Asset Value 47.14 38.55 38.55
Net Asset Value per share as at 31 March 2016 was 66.95 pence (62.06 pence as
at 31 December 2015).
The Net Asset Value attributable to the Ordinary Shares is calculated under
International Financial Reporting Standards (IFRS). It includes all current
year income after the deduction of dividends and capital redemptions paid prior
to 31 March 2016.
On a like-for-like basis the Euro valuation of the property portfolio decreased
by 0.87% to EUR57.1 million for the quarter. In Sterling currency terms, the
property valuation was GBP45.2 million in March 2016 (including the effects of
valuation movements, capital expenditure and foreign exchange movements). The GBP
/EUR foreign exchange rate applied to the Company's Euro investments in its
subsidiary companies at 31 March 2016 was 1.261 (31 December 2015: 1.357).
The Company's net property yield on current market valuation (after acquisition
and operating costs) as at 31 March 2016 was 9.0%.
SHARE PRICE AND DISCOUNT TO NET ASSET VALUE
As at close of business on 31 March 2016, the mid-market price of the Company's
shares on the London Stock Exchange was 53.88 pence, representing a discount of
19.5% to the Net Asset Value of 66.95 pence per share.
FUND GEARING
Unaudited Unaudited
31 December 2015 31 March 2016 Movement
GBPmillion /% GBPmillion /% GBPmillion /%
Property portfolio * 42.41 45.23 2.82 -6.2%
Borrowings 15.72 14.24 -1.48 10.4%
Total gross gearing 37.1% 31.5% -5.6 percentage
points
Total net gearing ** 28.2% 27.2% -1.0
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.
LOAN FACILITIES
Gross Loan to Value Unaudited Unaudited
(LTV) Covenants
31 December 2015 31 March 2016 Maximum
Main loan facility 50.7% 42.6% 60.00%
As at 31 March 2016, the loan-to-value ratio on the main loan facility was
42.6% based on the bank asset valuation. The loan has an LTV covenant of 60%.
Interest Cover Ratio Historic Minimum Projected Minimum
at 31 March 2016
Unaudited Unaudited
Main loan facility covenant 2.54x 2.0x 3.32x 1.85x
Interest Cover Ratio (ICR) is calculated as net financing expense payable as a
percentage of net rental income less movement in arrears.
CASH POSITION
The Company and its subsidiaries (Agnadello included) held total cash of GBP8.93
million at 31 March 2016. The Company returned GBP11.00 million to shareholders
in January 2015. Cash is held within the Trust's holding structure to cover
potential liabilities arising from outstanding representations and warranties,
as well as running costs.
MATERIAL EVENTS
Except for those noted above, the Board of the Company is not aware of any
significant event or transaction which occurred between 31 March 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
Sponsor and Broker
Stifel Nicolaus Europe Limited
150 Cheapside
London EC2V 6ET
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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