Balanced Commercial Property Trust Regulatory News (BCPT)

24 Apr 2008 16:12

F&C Commercial Property Trust Ltd24 April 2008 F&C Commercial Property Trust Limited Interim Management Statement For the Three Month Period from 1 January 2008 to 31 March 2008 Investment Objective The investment objective of the Company is to provide shareholders with anattractive level of income together with the potential for capital and incomegrowth from investing in a diversified UK commercial property portfolio. Performance Summary Total Return For the three month period ended 31 March 2008Net asset value per share * (5.6)%Ordinary Share price 9.0%Investment Property DatabankUK Monthly Index (3.4)%FTSE All-Share Index (9.9)% Capital Values As at As at % Change 31 March 31 December 2008 2007 Published net asset value per share * 120.5p 129.2p (6.7)Ordinary Share price 97.0p 90.5p 7.2Investment Property Databank UK Monthly Index 190.62 200.09 (4.7)FTSE All-Share Index 2,927.05 3,286.67 (10.9)Discount to published net asset value * (19.5)% (30.0)%Gearing * # 21.1% 19.5%Net gearing * $ 14.4% 11.7% Sources: F&C Investment Business Limited, Investment Property Databank ('IPD'),Datastream. * Calculated under International Financial Reporting Standards ('IFRS') apartfrom the valuation of the indirect property funds to which a discount of 10 percent has been applied as explained in more detail below. Net asset value totalreturn is calculated assuming dividends are re-invested # Gearing: Secured Bonds/total assets (less current liabilities) $ Net gearing: (Secured Bonds - cash)/total assets (less current liabilities andcash) Review of the First Quarter Direct Properties The market continues to experience capital declines and has been furtheraffected by the deepening "credit crisis". The IPD UK Monthly Index recorded acapital decline of 4.7 per cent over the quarter. The Company's direct propertyportfolio fell in value by 6.2 per cent with its Central London and South EastIndustrial properties most affected. The portfolio also suffered as valuers aremoving away from equivalent yields to initial yields, being the leadcapitalisation rate. During the quarter the Company completed the refurbishment of four floors atCharles House, 5-11 Regent Street, London SW1. The sixth floor comprisingapproximately 4,600 sq ft has been let to PCE Investors at a rent of £387,940 pa(£85.00 psf). This is ahead of the pro-forma ERV of £72.50 psf upon which thescheme was appraised. The first floor is currently under offer with interestbeing shown in the lower ground and ground floors. The refurbishment of threefloors at 7 Birchin Lane, London EC3 also completed at the beginning of 2008.The fourth floor has been let to Execuzen Ltd at £126,945 pa (£45.00 psf) andthe eighth floor to SNL Financial Ltd at £59,442 pa (£47.50 psf). The thirdfloor remains available to let. At 6-8 James Street, London W1 (part of StChristopher's Place Estate) the refurbished third floor has been let to PensusFund Management at £115,000 pa (£61.06 psf). The Company is also undertakingrefurbishment works at 69 Wigmore Street, London W1 (1,930 sq ft) which ispre-let at rents ranging from £47.50 psf to £55.00 psf and at 11-12 Gees Courtwhere the lease of the retail units has been regeared with Mulberry, allowingthe release of the upper floors and their conversion from ancillary space tooffices. The Company is committed to the development of 24/27 Great Pulteney Street,London W1 where resolution to grant consent was given last July. Arranged overlower ground, ground and five upper floors the scheme will provide approximately33,300 sq ft of Grade A accommodation in a leading edge design. The targetcompletion date is September 2010. The Company continues to work up the master plan for the redevelopment of theCowdray Centre, Colchester which includes a variety of residential, retail,offices and leisure uses. It is hoped the local authority will be supportive ofthese plans. There were no purchases or sales of properties during the quarter. Elsewhere in the portfolio the Managers are working through all lease events anda number of rent reviews have been successfully completed. They are also focusedon retaining a low void rate in an environment where total returns are likely tobe dominated by income. As at 31 March 2008 the void rate in the portfolio was2.5 per cent, which compares with the IPD UK Monthly Index rate of 8.0 per cent. Indirect Holdings The value of the Company's investments in two indirectly held property funds(the 'Indirect Holdings') fell by 5.7 per cent over the quarter to 31 March2008. The Board, in its announcement in January 2008 of the Company's net asset value('NAV') per share as at 31 December 2007, and in the Chairman's Statement withinthe Annual Report for the year ended on the date, signalled a departurefrom calculating the NAV in accordance with IFRS, when it did notuse the externally provided NAVs of the Indirect Holdings in arriving at thepublished NAV per share. The stated reason was that the Board did not considerthis to be an appropriate method of valuation in market conditions at that time.Accordingly, the Board discounted the NAVs of the Indirect Holdings by 10 percent to reflect its view of their likely realisable value should the Companywish to dispose of them in an orderly fashion over time. The Board continues to believe that, in current market conditions, it is notappropriate to use the externally provided NAVs of the Indirect Holdings inarriving at the Company's published NAV per share and has again, therefore,discounted the NAVs of the Indirect Holdings by 10 per cent for the same reasonsas before. The quantum of future discounts, if any, will be reviewed regularlyby the Board with independent advice as appropriate, and amended, as required,to reflect changes in market conditions and practice. All the figures within this statement are shown after the application of thediscount. Dividends The third interim dividend of 1.5 pence per share for the year ended 31 December2007 was paid on 25 January 2008. As previously announced, a fourth interimdividend of 1.5 pence per share will be paid on 25 April 2008 to shareholders onthe register on 28 March 2008. Share Buy Backs During the period the Company purchased 20.1 million Ordinary Shares to be heldin treasury, for a total consideration of £19.0 million, representing 2.7 percent of the Ordinary Shares in issue at the beginning of the period. These buybacks provided a cumulative enhancement of 0.9 pence to the NAV per share. Top Ten Holdings Property Sector 31/03/2008 Percentage of portfolio London W1, St Christopher's Place Estate Retail 12.0Newbury, Newbury Retail Park Retail 7.3 WarehouseLondon SW1, Cassini House, St James's Offices 6.8StreetColchester, Lion Walk Shopping Centre Shopping Centre 6.7Solihull, Sears Retail Park Retail 6.6 WarehouseIndustrial Property Investment Fund Industrial 6.5London SW19, Wimbledon Broadway Retail 5.2London SW1, 84 Eccleston Square Offices 5.0Uxbridge, 3 The Square, Stockley Park Offices 4.0Camberley, Watchmoor Park Offices 3.6 --------- Total 63.7 --------- Geographical Analysis Location 31/03/2008 31/12/2007 Percentage Percentage of portfolio of portfolioLondon - West End 33.0 33.2South East 26.3 26.3Indirect 9.9 9.8Eastern 8.9 8.8West Midlands 6.6 6.6Scotland 6.1 6.2North West 7.1 7.0Yorkshire and Humberside 1.1 1.1Rest of London 1.0 1.0 Total 100.0 100.0 Sector Analysis Location 31/03/2008 31/12/2007 Percentage Percentage of portfolio of portfolioOffices 40.5 41.2Retail 21.5 21.1Retail Warehouse 17.5 17.3Shopping Centres 10.1 10.1Industrial 10.4 10.3 Total 100.0 100.0 The Board is not aware of any significant events or transactions which haveoccurred since 31 March 2008 and the date of publication of this statement whichwould have a material impact on the financial position of the Company. Quarterly and Key Information Further information regarding the Company, including movements in the shareprice since the end of the period and the most recent annual and interimreports, can be found at the Company's website www.fccpt.co.uk. Enquiries: Richard KirbyF&C Investment Business LimitedTel: 0207 628 8000 This information is provided by RNS The company news service from the London Stock Exchange