Last checked at 31 Jul 2008 17:03
To: Company Announcements
Date: 31 July 2008
Company: F&C Commercial Property Trust Limited
Subject: Net Asset Value
Net Asset Value
The unaudited net asset value ('NAV') per share of F&C Commercial Property Trust Limited as at 30 June 2008 was 112.2 pence. This represents a decrease of 6.9 per cent from the published NAV per share as at 31 March 2008 of 120.5 pence.
The NAV is based principally on the external valuation of the Company's direct property portfolio prepared by DTZ Debenham Tie Leung Limited.
The NAV has been calculated under International Financial Reporting Standards ('IFRS').
The Board, in its announcement of the Company's results for the year ended 31 December 2007 and the NAV as at 31 March 2008, signalled a departure from calculating the NAV in accordance with IFRS, when it did not use the externally provided NAVs of its unitised investments in two indirectly held property funds, the Industrial Property Investment Fund and The Mall Fund (the 'Indirect Holdings'), in arriving at the published NAV per share (the 'Published NAV per share'). The Board did not consider this to be an appropriate method of valuation in the prevailing market conditions at that time. Accordingly the Board discounted the published NAVs of the Indirect Holdings by 10 per cent to reflect its view of their likely realisable value should the Company wish to dispose of them in an orderly fashion over time.
The Board has now appointed an independent valuer to value the Indirect Holdings, and the Company's NAV of 112.2p per share as at 30 June 2008 incorporates the Indirect Holdings at the Directors' valuation which reflects these independently produced values. The Company's auditors are satisfied that this treatment meets the requirements of IFRS. Accordingly, there is now no divergence between the Board's value of the Company's Indirect Holdings and the valuations required by IFRS for the period to 30 June 2008 and the Board therefore believes the NAV reflects the fair value of the Company's Indirect Holdings at that date.
The basis of valuation of the Indirect Holdings will continue to be reviewed regularly by the Board, with independent advice as appropriate, and amended, as required, to reflect changes in market conditions and practice.
The NAV includes all income to 30 June 2008 and is calculated after deduction of all dividends paid prior to that date. It does not include provision for the quarterly interim dividend, which had an ex-dividend date of 25 June 2008 and which was paid on 25 July 2008. The adjusted NAV per share after deducting such quarterly dividend payment was 110.7 pence.
Analysis of Movement in NAV
The following table provides an analysis of the movement in the unaudited NAV per share for the period from 31 March 2008 to 30 June 2008 (including the effect of gearing):
| Pence per share | % of opening NAV | |
| Published NAV per share as at 31 March 2008 | 120.5 | |
| Unrealised decrease in valuation of direct property portfolio | (4.7) | (3.9)* |
| Unrealised decrease in valuation of Indirect Holdings | (2.9) | (2.5)** |
| Realised loss on sale of Indirect Holdings | (0.5) | (0.4) |
| Share buy backs | 0.1 | 0.1 |
| Movement in revenue reserve | (0.3) | (0.2) |
| Published NAV per share as at 30 June 2008 | 112.2 | (6.9) |
| Published NAV per share as at 30 June 2008 (adjusted for dividends for which the share price had gone ex-dividend) | 110.7 |
* the ungeared decrease in the valuation of the direct property portfolio over the quarter to 30 June 2008 was 3.7%.
** the ungeared decrease in the externally provided NAVs of the Indirect Holdings over the quarter to 30 June 2008 was 16.1%.
Portfolio Analysis
| £m | % of portfolio as at 30 June 2008 | % movement in quarter | |
| Offices | 391.8 | 40.9 | (5.2) |
| West End | 187.2 | 19.5 | (5.7) |
| South East | 115.4 | 12.1 | (5.7) |
| Rest of UK | 78.9 | 8.2 | (3.7) |
| City | 10.3 | 1.1 | (1.0) |
| Retail | 214.0 | 22.4 | (2.0) |
| South East | 187.5 | 19.6 | (2.0) |
| Rest of UK | 26.5 | 2.8 | (2.6) |
| Industrial | 94.3 | 9.9 | (11.2) |
| South East | 17.1 | 1.8 | (3.5) |
| Rest of UK | 21.9 | 2.3 | (2.0) |
| Indirect | 55.3 | 5.8 | (16.3) |
| Shopping Centres | 83.5 | 8.7 | (14.5) |
| Direct | 67.6 | 7.1 | (1.6) |
| Indirect | 15.9 | 1.6 | (40.2) |
| Retail Warehouse | 172.9 | 18.1 | (2.8) |
| Total Property | 956.5 | 100.0 | (5.7) |
The direct property portfolio will next be valued by an external valuer during September 2008 and the NAV per share as at 30 September 2008, which will also include the valuation of the Indirect Holdings on that date, will be announced in October 2008.
Enquiries:
Richard Kirby
F&C Investment Business Limited
Tel: 0207 628 8000
Graham Reaves
G&N Collective Funds Services Limited
Tel: 0131 226 4411