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26 Apr 2010 07:00
IRP Property Investments Limited
Interim Management Statement
For the Three-Month Period from 1 January 2010 to 31 March 2010
Investment Objective
The investment objective is to provide shareholders with an attractive level of income together with the potential for capital and income growth from investing in a diversified UK commercial property portfolio.
Performance Summary
|
Total Return * |
For the three month period ended 31 March 2010 |
For the nine month period ended 31 March 2010 |
|
|
|
|
|
Net asset value per share |
+3.8% |
+25.8% |
|
Ordinary share price |
-1.9% |
+53.8% |
|
Investment Property Databank UK Monthly Property Index |
+5.7% |
+19.6% |
|
FTSE All-Share Index |
+6.4% |
+37.4% |
|
Capital Values - 3 months |
As at 31 March 2010 |
As at 31 December 2009 |
% Change |
|
|
|
|
|
|
Net asset value per share |
85.8p |
84.4p |
+1.7 |
|
Ordinary share price |
82.5p |
85.0p |
-3.9 |
|
FTSE All-Share Index |
2,910.2 |
2,760.8 |
+5.4 |
|
(Discount)/Premium to net asset value |
(3.8)% |
0.7% |
|
|
Net gearing # |
33.5% |
34.0% |
|
|
|
|
|
|
|
Capital Values - 9 months |
As at 31 March 2010 |
As at 30 June 2009 |
% Change |
|
|
|
|
|
|
Net asset value per share |
85.8p |
72.9p |
+17.7 |
|
Ordinary share price |
82.5p |
57.5p |
+43.5 |
|
FTSE All-Share Index |
2,910.2 |
2,172.1 |
+34.0 |
|
Discount to net asset value |
(3.8)% |
(21.1)% |
|
|
Net gearing # |
33.5% |
34.4% |
|
|
|
|
|
|
Sources: F&C Investment Business Limited, Investment Property Databank ('IPD'), Datastream.
* - All total returns are based on net dividends re-invested
# - Net gearing: Bank debt (less cash) divided by fair value of investment properties
Dividends
The second interim dividend for the year ending 30 June 2010 of 1.8 pence per share was paid on 26 March 2010. In the absence of unforeseen circumstances it is the intention of the Board to maintain quarterly dividends at this rate, giving a total dividend of 7.2 pence per share for the 2009/10 financial year.
Review for the Period
All property total returns remained strongly positive in the first quarter of 2010 at 5.7%, according to the IPD UK Monthly Index, after a record performance in the previous three months. Retail and office property both out-performed during the quarter with retail warehousing and Central London offices especially robust. There are some signs of yield resistance at the prime end and the volume of investment activity halved compared with the previous three months. Institutions remain net investors but overseas buying has slowed. The occupational market remains weak but the pace of rental decline has slowed and Central London offices saw a return to rental growth during the quarter.
The value of the portfolio as at 31 March 2010 was £156.0 million. The Company's portfolio has won the IPD/IPF UK Property Investment Awards 2009 for the" Balanced Fund Highest Total Return annualised over 3 years to December 2009". During this period the Company's portfolio returned -4.1% per annum, compared with the IPD Monthly Index which recorded -9.2% per annum over the same period.
During the quarter to 31st March 2010, the Company's portfolio increased in value by 2.7% and together with income produced a total return 4.4%, which underperformed the IPD Monthly Total Return Index which recorded 5.7%.
Significant capital gains came from the Company's property at Clifton Moorgate, York which increased by £450,000 or 5.9%. Unit 3663, Echo Park, Banbury increased in value by £400,000, or 2.3% and Southampton International Park increased by £390,000, or 3.5%.
The proportion of vacant accommodation remains low at 1.5%, compared with IPD at 10.8%. The major voids are Unit 7 Lakeside Road, Colnbrook, an industrial unit with a rental value of £120,200pa and Unit 2, Above Bar Church, Southampton, a retail unit with a rental value of £80,500pa.
Following the successful letting of part of 7/11 Bridge Street Guildford to Tesco, the Company has completed an agreement to lease the remainder of the building to the Academy for Contemporary Music on a lease for 15 years at an average stepped annual rent of £42,000. The average weighted unexpired lease term of the portfolio is 7.9 years.
Top Ten Holdings
|
Property |
Sector |
31/03/2010 Percentage of portfolio |
|
Unit 3663, Echo Park, Banbury
|
Industrial |
10.8% |
|
Units 1-8, Lakeside Road, Colnbrook
|
Industrial |
7.6% |
|
Southampton International Park, Eastleigh
|
Industrial |
7.3% |
|
30/40, The Parade & 47/59A Warwick Street, Leamington Spa
|
Retail |
6.7% |
|
Mercury House, 1 Dove Wynd, Strathclyde Business Park
|
Offices |
6.2% |
|
Hemel Gateway, Boundary Way, Hemel Hempstead
|
Industrial |
5.6% |
|
1-2 Lochside Way, Edinburgh Park, Edinburgh
|
Offices |
5.2% |
|
Clifton Moor Gate, York
|
Retail Warehouse |
5.1% |
|
Swift House, Cosford Lane, Rugby |
Industrial |
4.0% |
|
Churchill Way, Nelson |
Retail Warehouse |
3.5% |
|
|
|
|
|
Total |
|
62.0% |
Geographical Analysis
|
Location |
31/03/2010 Percentage of Portfolio |
|
31/12/2009 Percentage of Portfolio |
|
South East |
50.1 |
|
50.0 |
|
West Midlands |
17.1 |
|
17.1 |
|
Scotland |
13.0 |
|
13.2 |
|
Yorkshire and Humberside |
5.1 |
|
5.0 |
|
North West |
4.0 |
|
4.0 |
|
East Midlands |
2.9 |
|
2.9 |
|
Eastern |
2.6 |
|
2.6 |
|
London - West End |
2.3 |
|
2.3 |
|
Rest of London |
1.8 |
|
1.8 |
|
South West |
0.7 |
|
0.7 |
|
North East |
0.4 |
|
0.4 |
|
|
|
|
|
|
Total |
100.0 |
|
100.0 |
Sector Analysis
|
Sector |
31/03/2010 Percentage of Portfolio |
|
31/12/2009 Percentage of Portfolio |
|
Industrial |
38.1 |
|
38.3 |
|
Retail |
34.7 |
|
34.4 |
|
Offices |
18.6 |
|
18.8 |
|
Retail Warehouse |
8.6 |
|
8.5 |
|
|
|
|
|
|
Total |
100.0 |
|
100.0 |
The Board is not aware of any significant events or transactions which have occurred between 31 March 2010 and the date of publication of this statement which would have a material impact on the financial position of the Company.
Quarterly and Key Information
Further information regarding the Company, including performance since launch and the most recent annual and interim reports, can be found at the Company's website www.irppropertyinvestments.com, or at www.fandc.com.
For further information please contact:
Ian McBryde/Scott Macrae
F&C Investment Business Limited
Tel: 0207 628 8000
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