26 Oct 2017 11:13
F&C UK Real Estate Investments Ltd - Net Asset Value(s)F&C UK Real Estate Investments Ltd - Net Asset Value(s)
PR Newswire
London, October 26
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 per share | % of opening NAV | |
| Net asset value per share as at 30 June 2017 | 100.1 | |
| Unrealised movement in valuation of property portfolio (including the effect of gearing) | 1.0 | 1.0* |
| 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 | £m | % of portfolio as at 30 September 2017 | % capital value movement in quarter |
| 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 £9.56 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 £525,300 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
| £m | Pence per share | % of Net 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 SecretaryNorthern Trust International Fund Administration Services (Guernsey) LimitedTrafalgar CourtLes BanquesSt Peter PortGuernseyGY1 3QLTel: 01481 745001Fax: 01481 745051
Peter LoweScott MacraeF&C Investment Business LtdTel: 0207 628 8000Fax: 0131 225 2375