Circle Property PLC Trading and Valuation Update (2680C)
October 16 2020 - 2:00AM
UK Regulatory
TIDMCRC
RNS Number : 2680C
Circle Property PLC
16 October 2020
16 October 2020
Circle Property Plc
("Circle" or the "Company")
Trading and Valuation Update
Circle Property Plc (AIM: CRC), which invests in, develops and
actively manages well-located regional office assets, is pleased to
provide the following update further to the announcements on 14
July and 25 September 2020.
Rent collection
Since the outbreak of the COVID-19 pandemic in March 2020, we
have continued to focus on rent collection and we are pleased with
our performance to date. As at the date of this announcement, the
Company is pleased to report 75% rent collection for the quarter to
December 2020 reflecting both the lack of exposure to retail and
the strength of our covenants. Taking into account agreed monthly
payments, the September quarterly rent collection stands at 80% of
rent due.
Rent collection for the March and June 2020 quarters has
improved since last reported and now stands at 93% and 89%,
respectively. The Company remains in constant and constructive
dialogue with all tenants, adopting a flexible approach to the
payment of arrears according to need, and anticipates these rent
collection numbers will continue to increase further.
Valuation update
The Company's investment and development portfolio, which is
almost entirely focused in the regional office sector with no
exposure to retail (other than two public houses and one restaurant
in Birmingham), has been independently valued at GBP137.85 million
as at 30 September 2020* (31 March 2020: GBP139.45 million). This
marginal valuation decline is due to the earmarked strategic
investment of approximately GBP1.6 million to refurbish two assets
(K3 in Kents Hill, Milton Keynes and 135 Aztec West, Bristol),
rather than negative market movement.
Over the six-month period, net asset value per share ("NAV") has
decreased by 1% reflecting an unaudited estimated NAV of GBP2.83
per share (31 March 2020: GBP2.85 per share).
Financing and liquidity
The Company has a financing facility in place with RBS and HSBC
for GBP100 million. The senior revolving facility is for GBP65
million (of which the Company has drawn GBP62.3 million) with an
'accordion' option for a further GBP35 million. As at 30 September
2020, the Company had GBP4.5 million cash on balance, reflecting a
gross LTV of 43.77%. In aggregate, the Company has GBP7.2 million
of immediate liquidity at its disposal.
As previously announced, with all of the challenges arising from
COVID-19, and the likely implications for the economy, the Board
considers it prudent to reduce gearing from the current level. We
have a number of assets that have benefited from our active
management approach and where we have added considerable value
following redevelopment, lease restructures or renewals. We believe
these investments, with secure tenants and long-term income
attached, will be highly sought after as investors look to secure
income in an uncertain and low yielding macroeconomic
environment.
John Arnold, CEO of Circle Property Plc, commented:
"We have continued to work closely with our tenants and this has
resulted in strong levels of rent collection. Despite the
disruption caused by the COVID-19 pandemic, our focus on regional
offices and our notable lack of exposure to retail property has
allowed us to maintain a strong portfolio valuation of GBP137.85
million. We continue to actively manage our portfolio and we look
forward to updating investors further on the progress made at our
Interim Results in due course."
* taking into account the impact of Covid-19 and the Company's
valuers' inclusion of a 'material uncertainty clause' on the
independent valuations (in accordance with VPS3 and VPGA 10 of the
RICS valuation - Global Standards)
This announcement is inside information for the purposes of
Article 7 of EU Regulation 596/2014.
+44 (0)207 930
Circle Property Plc 8503
John Arnold, CEO
Edward Olins, COO
+44 (0)207 397
Cenkos Securities 8900
Katy Birkin
Mark Connelly
+44 (0)203 897
Radnor Capital 1830
Joshua Cryer
Iain Daly
+44 (0)203 757
Camarco 4992
Ginny Pulbrook
Oliver Head
About Circle Property Plc
Circle is amongst the best performing quoted UK real estate
companies by NAV total return (NAV growth and dividend) having
delivered consistent returns with 101% NAV growth since IPO in 2016
in absolute terms.
Circle focusses on acquiring assets in regional cities, many of
which have significant office supply constraints, and on office
assets with active management potential (refurbishment
opportunities, under-rented or vacant properties or short leases),
rather than just maximising initial rental yields.
Circle is not a Real Estate Investment Trust (REIT) and can
actively recycle proceeds from asset sales into its refurbishment
and redevelopment pipeline, as well as future investment
opportunities, therefore targeting a broader range of returns for
shareholders, which are primarily driven by NAV growth.
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