F&C UK Real Est. Inv. Net Asset Value(s)
October 26 2017 - 6:14AM
UK Regulatory
TIDMFCRE
To: Company Announcements
Date: 26 October 2017
Company: F&C UK Real Estate Investments Limited
LEI: 231801XRCB89W6XTR23
Subject: Net Asset Value
Net Asset Value
The unaudited net asset value per share of F&C UK Real Estate Investments
Limited ("FCRE") as at 30 September 2017 was 102.7 pence. This represents an
increase of 2.6 per cent from the net asset value per share as at 30 June 2017
of 100.1 pence and a NAV total return for the quarter of 3.9 per cent.
The net asset value is based on the external valuation of the Group's property
portfolio prepared by Cushman & Wakefield.
The net asset value is calculated under International Financial Reporting
Standards ("IFRS").
The net asset value includes all income to 30 September 2017 and is calculated
after deduction of all dividends paid prior to that date. It does not include
a provision for the dividend for the quarter to 30 September 2017, which is
expected to be paid in December 2017.
Share Price
The share price was 106.0 pence per share at 30 September 2017, which
represented a premium of 3.2 per cent to the NAV per share announced above. The
share price total return for the quarter was 0.5 per cent.
Breakdown of NAV movement
Set out below is a breakdown of the change to the unaudited net asset value per
share calculated under IFRS over the period from 30 June 2017 to 30 September
2017.
Pence % of
per opening
share NAV
Net asset value per share as at 30 June 2017 100.1
Unrealised movement in valuation of property 1.0 1.0*
portfolio (including the effect of gearing)
Surrender Premium received 1.8 1.8
Movement in revenue reserves (0.2) (0.2)
Net asset value per share as at 30 September 2017 102.7 2.6
* The un-geared increase in the valuation of the property portfolio over the
quarter to 30 September 2017 was 0.7%.
The NAV return for the quarter was enhanced on account of an asset management
initiative at Northfields Retail Park, Rotherham where the existing lease was
surrendered in return for a substantial cash payment to FCRE, alongside a
simultaneous re-letting of the property. This asset management initiative saw
a reduction of the overall level of rent receivable, rebased in line with the
current market level for a retail warehouse property of this size in this
location. This was coupled with an extension of the guaranteed lease term to
an occupier who is investing considerable capital into the asset. This
transaction created an attractive total return for the company with the cash
payment received from the out-going tenant being significantly in excess of the
negative impact on the asset valuation.
The net gearing as at 30 September 2017 was 29.4%#
# Bank debt (less net current assets) divided by fair value of investment
properties
Portfolio Analysis GBPm % of % capital
portfolio value
as at 30 movement
September in quarter
2017
Offices 91.5 26.3 1.4
West End 27.7 7.9 7.0
South East 33.7 9.7 -
Rest of UK 30.1 8.7 (1.6)
Retail 65.2 18.7 0.8
West End 8.4 2.4 11.3
Rest of London 3.9 1.1 -
South East 18.2 5.2 (0.8)
Rest of UK 34.7 10.0 (0.5)
Industrial 118.3 33.9 1.9
South East 118.3 33.9 1.9
Retail Warehouse 73.7 21.1 (2.0)
Rest of London 9.1 2.6 2.8
Rest of UK 64.6 18.5 (2.7)
Total Property 348.7 100.0 0.7
Property Purchases and Sales
During the quarter, IRP Holdings Limited, a subsidiary of FCRE, purchased a
59,000 sq ft distribution unit in Basingstoke for GBP9.56 million, reflecting a
net initial yield of 5.2 per cent. The property is let to one tenant, Bunzl UK
Ltd, on a lease expiring 2027, at a rent of GBP525,300 per annum. The purchase
was funded out of the company's existing cash reserves.
There were no other purchases or sales in the quarter.
Summary Balance Sheet
GBPm Pence % of
per Net
share Assets
Property Portfolio per Valuation Report 348.7 144.8 141.1
Adjustment for lease incentives (4.4)
(1.8) (1.8)
Fair Value of Property Portfolio 344.3 143.0 139.3
Cash 6.2 2.6 2.5
Trade and other receivables 6.1 2.5 2.5
Trade and other payables (7.3) (3.0) (3.0)
Interest-bearing loans (102.1) (42.4) (41.3)
Net Assets at 30 September 2017 247.2 102.7 100.0
The property portfolio will next be valued by an external valuer during
December 2017 and the net asset value per share as at 31 December 2017 will be
announced in January 2018.
This announcement contains inside information.
Enquiries:
The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL
Tel: 01481 745001
Fax: 01481 745051
Peter Lowe
Scott Macrae
F&C Investment Business Ltd
Tel: 0207 628 8000
Fax: 0131 225 2375
END
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