30 July
2015
STANDARD LIFE INVESTMENTS PROPERTY
INCOME TRUST LIMITED (LSE: SLI)
Unaudited Net Asset Value as at
30 June 2015
Key Highlights
-
Net asset value per ordinary share was 77.3p as at 30 June 2015 which is arrived at after deducting
the Q2 dividend due to be paid in August
2015. This is an increase of 2.2% from 31 March 2015 representing a NAV total return of
3.8% for Q2.
-
Successful placing of approximately 11.6m ordinary shares at
80.3p per share under the Company’s authority to issue shares
pursuant to the disapplication of pre-emption rights approved by
shareholders at the Company’s AGM on 27 May
2015, raising gross proceeds of approximately £9.3m.
-
One industrial property purchased in June
2015 for £4.6m excluding costs. Two office properties sold
during Q2 for £4.9m excluding costs and one industrial property
sold during Q2 for £3.5m excluding costs.
-
Dividend yield of 5.5% based on share price of 84.25p
(28 July 2015).
Net Asset Value (“NAV”)
The unaudited net asset value per ordinary share of Standard
Life Investments Property Income Trust Limited (“SLIPIT”) at
30 June 2015 was 77.3 pence including the adjustment for the Q2
dividend payment due in August 2015.
This is an increase of 2.2% over the net asset value of
75.6 pence (including the adjustment
for the Q1 dividend) per share at 31 March
2015. The net asset value is calculated under International
Financial Reporting Standards (“IFRS”).
The net asset value incorporates the external portfolio
valuation by Jones Lang LaSalle at
30 June 2015. The property portfolio
will next be valued by the external valuer during September 2015 and the next quarterly net asset
value will be published thereafter.
Breakdown of NAV movement
Set out below is a breakdown of the change to the unaudited NAV
per share calculated under IFRS over the period 31 March 2015 to 30 June
2015.
|
£m |
Pence per
share |
% of opening
NAV |
Unaudited Net Asset Value at 31
March 2015 |
212.5 |
76.8 |
- |
Gain - unrealised on the standing
portfolio following revaluation of property portfolio |
4.5 |
1.6 |
2.1% |
Loss - on sale of properties |
(0.5) |
(0.2) |
(0.2%) |
Costs on the purchase of
investment property |
(0.3) |
(0.1) |
(0.2%) |
Decrease in unrealised interest
rate swap liability |
1.0 |
0.4 |
0.5% |
Increase in share capital
(net) |
9.2 |
|
|
Unaudited Net Asset Value at 30
June 2015 before |
|
|
|
adjustment for dividend |
226.4 |
78.5 |
2.2% |
Adjustment for Q2 dividend |
(3.3) |
(1.2) |
|
Unaudited Net Asset Value at 30
June 2015 after |
|
|
|
adjustment for dividend |
223.1 |
77.3 |
|
|
|
|
|
|
|
|
|
European Public Real Estate
Association (“EPRA”)* |
30 Jun 2015 |
31 Mar 2015 |
EPRA Net Asset Value before
adjustment for dividend |
£228.3m |
£215.5m |
EPRA Net Asset Value after
adjustment for dividend |
£225.0m |
£212.2m |
EPRA Net Asset Value per share
before adjustment for dividend |
79.2p |
77.9p |
EPRA Net Asset Value per share
after adjustment for dividend |
78.0p |
76.7p |
|
|
|
The Net Asset Value per share is calculated using 288,387,160
shares of 1p each being the number in issue on 30 June 2015.
* The EPRA net asset value measure is to highlight the fair
value of net assets on an on-going, long-term basis. Assets and
liabilities that are not expected to crystallise in normal
circumstances, such as the fair value of financial derivatives, are
therefore excluded.
Investment Manager Commentary
The Company had a busy Q2 with both asset management and
investment transactions. The agreement for lease on the letting of
four units at Ocean Trade Centre was completed (the refurbishment
completes end July) and the Company has put the remaining units
available there under offer which are all on 10 year leases to very
good covenants. The Company also agreed terms (but has not yet
completed) lease re-gears on several large expiries due in Q4 this
year.
The Company undertook a number of sales of smaller investments
that it felt offered poorer prospects for the future including an
industrial asset in Swindon for £3.5m, offices in Swansea for £1.3m
and Chelmsford for £3.6m. The Company exchanged contracts on the
sale of a small industrial unit in Stockton on Tees for £1.3m with
completion due in mid-August. Since the quarter end the Company
completed the sale of an industrial unit in Mansfield for £2.6m,
and the sales of two other investments, an office and an industrial
unit, are in solicitors’ hands.
At the same time the Company has recycled the available cash
into a number of new investments. During the quarter the Company
completed the purchase of two industrial units in Bristol, close to
the junction of the M4 and M5 for £4.6m. One unit is currently
vacant and will be refurbished before re-letting. Since the quarter
end the Company has also completed the purchase of a retail
warehouse investment in Bradford for £5.1m excluding costs and a
small portfolio of three offices for £13.25m excluding costs.
Purchases of three other investments totalling £10.8m are in
solicitors’ hands.
These transactions utilise all the capital available to invest,
including the equity raised in June 2015.
The Company provided a total NAV return of 3.8% over the
quarter, and at a real estate portfolio level provided a total
return of 2.9% (on investments held through the whole period the
return was 3.2%). This compares to the IPD monthly index return of
3.6% for the quarter.
Cash position
As at 30 June 2015 the Company had
borrowings of £84.4m and a cash position of £27.3m (excluding rent
deposits) therefore cash as a percentage of debt was 32.3%.
Dividends
The Company paid an interim property income dividend in respect
of the quarter ended 31 March 2015 of
1.161p per Ordinary Share, with ex-dividend and payment dates of
7 May 2015 and 22 May 2015 respectively. The Company declared a
second interim property income dividend on 27 July 2015 in respect of the quarter ended
30 June 2015 of 1.161p per Ordinary
Share, with ex-dividend and payment dates of 6 August 2015 and 21
August 2015 respectively. The Q2 property income dividend
has been deducted from the NAV above.
Loan to value and interest rate
As at 30 June 2015 the loan to
value ratio (assuming all cash is placed with RBS as an offset to
the loan balance) was 19.8% (31 March
2015: 23.4%). The bank covenant level is 65%. As a result of
interest rate swaps the weighted average interest rate on the loan
is fixed at 3.7% until the loan matures in December 2018.
The Company has two interest rate hedges which mature in
December 2018 and have a current
liability of £1.9m (31 March 2015:
£2.9m). These had a positive impact on the NAV of 0.4p per share or
0.5% over the quarter.
Net Asset analysis as at 30 June 2015 (unaudited)
|
£m |
% of net assets |
Office |
110.8 |
49.0 |
Retail |
63.6 |
28.1 |
Industrial |
113.5 |
50.1 |
Total Property Portfolio |
287.9 |
127.2 |
Adjustment for lease
incentives |
(2.2) |
(1.0) |
Fair value of Property
Portfolio |
285.7 |
126.2 |
Cash |
27.3 |
12.1 |
Other Assets |
7.1 |
3.1 |
Total Assets |
320.1 |
141.4 |
Non-current liabilities |
(86.0) |
(38.0) |
Current liabilities |
(7.7) |
(3.4) |
Total Net Assets |
226.4 |
100.0 |
Breakdown in valuation movements over
the period 1 Apr 2015 to 30 Jun 2015
|
Exposure as at 30
Jun 2015 (%) |
Capital Value
Movement on Standing Portfolio (%) |
Capital Value
Movement on Portfolio (£m) |
External Property Valuation at 31
Mar 2015 |
|
|
286.7 |
IPD Sub Sector Analysis: |
|
|
|
RETAIL |
|
|
|
South East Retail |
5.7 |
0.3 |
0.0 |
Retail Warehouses |
16.3 |
0.4 |
0.2 |
|
|
|
|
OFFICES |
|
|
|
London City Offices |
6.2 |
1.3 |
0.2 |
London West End Offices |
3.6 |
9.0 |
0.8 |
South East Offices |
18.8 |
2.7 |
(2.1)* |
Rest of UK Offices |
10.0 |
1.7 |
(0.7)* |
|
|
|
|
INDUSTRIAL |
|
|
|
South East Industrial |
8.9 |
3.1 |
0.8 |
Rest of UK Industrial |
30.5 |
1.8 |
2.5* |
|
|
|
|
External Property Valuation at 30
Jun 2015 |
100.0 |
1.7 |
288.4** |
*Due to purchase of one industrial investment, the sale
of one industrial investment and the sale of two office
investments.
**Adjusted to exclude sales costs of properties held for sale at
30 June 2015.
Top 10 Properties
|
30 Jun 15 (£m) |
|
|
White Bear Yard, London |
15-20 |
DSG, Preston |
15-20 |
Chester House, Farnborough |
15-20 |
Symphony, Rotherham |
15-20 |
Denby 242, Denby |
10-15 |
Hertford Place,
Rickmansworth |
10-15 |
St James's House, Cheltenham |
10-15 |
3B - C Michigan Drive, Milton
Keynes |
10-15 |
Hollywood Green, London |
10-15 |
Bourne House, Staines Upon
Thames |
10-15 |
On 15 July the Company completed a part sale of Windsor Court
& Crown Farm, an industrial investment in Mansfield for £2.6m
excluding costs.
On 23 July the Company completed the purchase of a retail
investment in Bradford for £5.1m excluding costs.
On 24 July the Company completed the purchase of an office
portfolio of 3 properties for £13.25m excluding costs.
The Board is not aware of any other significant events or
transactions which have occurred between 30
June 2015 and the date of publication of this statement
which would have a material impact on the financial position of the
Company.
Details of the Company may also be found on the Investment
Manager’s website which can be found at:
www.standardlifeinvestments.com/its
For further information:-
Jason Baggaley – Real Estate Fund
Manager Standard Life Investments
Tel +44 (0) 131 245 2833 or jason_baggaley@standardlife.com
Gordon Humphries – Head of
Investment Companies Standard Life Investments
Tel +44 (0) 131 245 2735 or gordon_humphries@standardlife.com
The Company Secretary
Northern Trust International Fund Administration Services
(Guernsey) Ltd
Trafalgar Court
Les Banques
St Peter Port
GY1 3QL
Tel: 01481 745001
Fax: 01481 745085