TIDMALPH
RNS Number : 0001X
Alpha Pyrenees Trust Limited
14 November 2014
14 November 2014
Alpha Pyrenees Trust Limited (the "Trust" or the "Company")
Trading Update
Alpha Pyrenees Trust Limited today publishes its trading update
statement for the quarter ending 30 September 2014 and the period
up until the date of this announcement. The information contained
herein has not been audited.
KEY POINTS
-- STRATEGIC DISPOSAL OF GENNEVILLIERS PROPERTY AT BOOK VALUE FOR PROCEEDS OF EUR7.4 MILLION
-- NEW LEASES AND LEASE EXTENSIONS COVERING 84,250 SQUARE METRES
(33.7% OF THE TRUST'S CURRENT PORTFOLIO BY AREA) ACHIEVED SINCE 1
JULY 2014
-- A NEW LEASE HAS BEEN SIGNED WITH THE TRUST'S LARGEST TENANT,
ALCATEL-LUCENT, EXTENDING THEIR FIXED TERM COMMITMENT TO 9
YEARS
-- WEIGHTED AVERAGE LEASE LENGTH HAS INCREASED TO 10.3 YEARS TO
EXPIRY AND 6.6 YEARS TO NEXT BREAK FOLLOWING LEASE EXTENSIONS
-- 86% OF PORTFOLIO INCOME COMES FROM GRADE A TENANTS
-- 92% OF THE TRUST'S PORTFOLIO BY VALUE IS IN FRANCE AND 83% IS IN THE PARIS REGION
-- ADJUSTED NAV* 10.7 PENCE PER SHARE AS AT 30 SEPTEMBER 2014
(30 JUNE 2014: 12.0 PENCE PER SHARE)
VALUATION AND NET ASSET VALUE ("NAV")
The Trust's investment portfolio was last valued on 30 June 2014
at EUR278.0m (GBP217.2m at 30 September 2014 exchange rate) giving
an average valuation yield across the portfolio of 8.2% (French
portfolio 8.1% and Spanish portfolio 9.0%).The next independent
revaluation will take place as at 31 December 2014.
As at 30 September 2014 the adjusted NAV* is 10.7 pence per
share. The decrease in adjusted NAV from 30 June 2014 (12.0 pence
per share) is due to the combined effect of Euro weakening and the
loss incurred in the period.
*Adjusted NAV - unaudited, after adjustments for the interest
rate swap derivatives and 50% of the deferred tax provisions.
FINANCING
The Trust's existing borrowing facilities with Barclays Bank PLC
terminate on 10 February 2015. The Board continues to pursue its
options in order to support the settlement of the bank borrowings
as they mature, including a combination of realising equity through
asset sales and potential financing alternatives.
As at 30 September 2014, the Trust has total borrowings of
GBP210.7m (EUR269.7m) under its facilities with Barclays and there
are no Loan to Value ("LTV") covenant tests until loan maturity on
any of the Trust's properties.
DIVIDEND
The Trust does not currently propose to pay dividends.
PROPERTY UPDATE
The Trust's Investment Manager has continued to concentrate on
active asset management and property management initiatives within
the portfolio to secure the Trust's income and we are pleased to
report further progress in the letting of vacant areas and the
extension of leases.
Since 30 June 2014, new leases and lease extensions covering
approximately 84,250 square metres (33.7% of the Trust's current
portfolio by area) have been achieved. as detailed below.
FRANCE
-- Villarceaux-Nozay A new 12 year lease has been signed with
the existing tenant, Alcatel-Lucent, with a minimum fixed term of 9
years with effect from 29 August 2014. The new lease represents an
increase of almost 5 years in fixed term commitment from the
previous lease which had approximately 4 years remaining. The
agreement includes a commitment from the Trust of EUR9m of staged
capital expenditure towards creating both new lettable area and
other building improvements at Nozay. This additional lettable area
will generate an additional EUR487,000 of rental income per annum
on completion. Nozay comprises approximately 36 hectares of
business park space located close to one of Paris' largest business
space centres, Courtaboeuf business park. It is also close to
Campus Paris-Saclay, a scientific hub of academic establishments
including 2 universities, 10 "grandes écoles" and 7 research
organizations. Nozay contains campus style offices together with
business space and ancillary accommodation totalling approximately
82,000 square metres and 3,000 car parking spaces post completion
of the works.
-- Goussainville - A new 3/6/9 year lease from November 2014 was
signed with Design Location an exhibition stand equipment company,
on 1,730 square metres of warehouse and office space.
-- Ivry - A new 6/9 year lease from November 2014 was signed
with Accedia, an electronics company specialising in CCTV and
security, on 520 square metres of vacant office space.
At the Trust's Evreux property, MSL Quadralog's lease terminated
in August 2014 on 9,640 square metres of warehouse space. The
Trust's Investment Manager is actively involved in the campaign to
re-let the property at the earliest opportunity.
The Investment Manager is also focussed on realising equity in
asset sales to support the settlement of the bank borrowings as
they mature and we are pleased to report the following progress in
this regard:
PROPERTY SALE
On 7th October 2014 the Trust sold an office investment located
at Gennevilliers for EUR7.4 million which is in line with its book
value. The property totals 3,410 square metres and is located on an
established business park 15km north of central Paris and is let
entirely to Husqvarna France on a 9 year lease with a fixed term of
6 years from April 2014. The purchaser was FRUCTIREGIONS a SCPI
managed by NAMI AEW Europe.
The proceeds from this sale will be held within the cash pooling
arrangement established with the Trust's lenders, Barclays, to
provide security for its loans and working capital for the Trust's
operations.
GENERAL
The Investment Manager remains focussed on ensuring service
charges are controlled; the annual level of property costs is
closely monitored and additional sources of income are
identified.
The Trust's portfolio has an overall level of average occupancy
of 83% (85% at 30 June 2014), measured by rental income as a
percentage of potential total income and the vacancy rate has
increased from 15% to 17% during the period primarily due to the
termination of the lease to MSL Quadralog at Evreux. Following the
lease extensions the weighted average lease length as at 30
September 2014 had increased to 10.3 years to expiry and 6.6 years
to next break (from 7.0 years to expiry and 4.0 years to next break
as at 30 June 2014) with 86% of the portfolio income coming from
Grade A tenants.
RENTAL INDEXATION
The INSEE Construction Cost Index ("ICC"), applicable to the
Trust's leases in France, showed an annualised growth of -0.98% for
the latest published quarter, Q2 2014, following an annualised
growth rate of 0.12% as at Q1 2014.
The Spanish Consumer Price Index, applicable to the Trust's
leases in Spain, was running at an annualised rate of growth of
-0.2% as at the end of September 2014 but estimates for the end of
October 2014 show that the contraction had decreased to -0.1%.
For further information:
Dick Kingston, Chairman, Alpha Pyrenees Trust Limited 01481 231100
Paul Cable, Fund Manager, Alpha Real Capital LLP 020 7391 4700
For more information on the Company, please visit
www.alphapyreneestrust.com.
FORWARD-LOOKING STATEMENTS
This trading update statement contains forward-looking
statements which are inherently subject
to risks and uncertainties because they relate to events and
depend upon circumstances that will
occur in the future. There are a number of factors that could
cause actual results to differ materially
from those expressed or implied by such forward-looking
statements. Forward-looking statements are
based on the Board's current view and information known to them
at the date of this statement. The
Board does not make any undertaking to update or revise any
forward-looking statements, whether as
a result of new information, future events or otherwise. Nothing
in this trading update statement
should be construed as a profit forecast.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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