EPIC.L Regulatory News (EPIC)

Ediston Property Investment Company plc

(LEI: 213800JRL87EGX9TUI28)

Net Asset Value ('NAV') as at 30 June 2022

And Trading Update

Ediston Property Investment Company plc (LSE: EPIC) (the 'Company') announces its unaudited NAV at 30 June 2022.

Quarter Summary

· NAV per share at 30 June 2022 of 98.35 pence (31 March 2022: 96.08 pence), an increase of 2.4% in the quarter.

· Fifth consecutive quarter of NAV growth.

· Fair value independent valuation of the property portfolio at 30 June 2022 of £242.45 million, a like-for-like increase of 2.7% on the valuation at 31 March 2022.

· NAV total return (including dividends) for the quarter of 3.7% (31 March 2022: 7.4%). 

· NAV total return of 19.0% for the year ended 30 June 2022.

· Portfolio weighted average unexpired lease length of 4.6 years and EPRA vacancy rate of 6.4%.

· Dividend paid in the quarter of 1.25 pence per share.

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· Post period end sold the last remaining non-retail warehouse asset for £5.0 million, 67% ahead of the 31 March 2022 valuation.

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Net Asset Value

The unaudited NAV of the Company at 30 June 2022 was £207.82 million, or 98.35 pence per share, an increase of 2.4% on the Company's NAV per share as at 31 March 2022.

The NAV attributable to the ordinary shares has been calculated under International Financial Reporting Standards ('IFRS'); the EPRA NAV is not reported separately in this update as it is the same as the IFRS NAV.

The NAV incorporates the independent portfolio valuation as at 30 June 2022 and undistributed income for the quarter, but does not include a provision for any accrued monthly dividend.

Investment and asset management activity

In April, the Company sold its leisure asset at the Lanyard, Hartlepool for a price of £2.6 million, which was 16.4% above the 31 December 2021 valuation. Prior to the sale, the Investment Manager had completed a lease extension with the tenant, Mecca Bingo Limited, which extended the unexpired lease term by seven years.

As announced on 5 July 2022, the Company sold its leisure unit at Southwater Square, Telford, its final non-retail warehouse property, for £5.0 million, a 67% premium to the 31 March 2022 valuation. The impact of the sale is included in this NAV.

Post period end, at Coatbridge, Glasgow, the Investment Manager completed an Agreement for Lease (AFL) with existing tenant B&Q, to secure them on the park for a further 10-years. B&Q had a lease expiry in December this year. As part of the transaction, B&Q will downsize from 102,000 sq. ft. to 79,960 sq. ft. Aldi, has signed an AFL for a 20,000 sq. ft. unit which will be created in the space vacated by B&Q. Planning permission has been obtained for the change to food use. On completion of the landlord works, Aldi will enter into a 20-year lease without break, subject to five-yearly rent reviews linked to RPI. This transaction has not been reflected in the NAV as at 30 June 2022.

This transaction follows the construction of two drive-thru pods in 2020, which are let to Burger King and Costa Coffee and will complete the transition of the park from a single-let DIY asset to a multi-let retail park with both food and coffee operators.

The Investment Manager is progressing other new acquisitions, lettings and lease restructures across the portfolio, which will further improve the Company's income stream. These will be reported on when completed.

Cash and debt

At the date of this announcement, the Company has approximately £50.7 million of cash available for investment and operational purposes. The Company also has £31.0 million of cash held in its debt facility, which is subject to the lender's LTV requirements being met for it to be released for investment purposes. These figures include the Hartlepool and Telford sale proceeds.

At the date of the June valuation, the average loan-to-value across the Company's two debt facilities was 33.1%. The Company is fully compliant with all debt covenants and has significant headroom against income and asset value covenants.

Summary

The Company has seen a fifth consecutive quarter of NAV growth, driven by the continued valuation improvement of the retail warehouse portfolio, and the sale above valuation of the Telford leisure asset.

Whilst the cost-of-living crisis and inflationary pressures may create headwinds for the retail sector in the short-term, the Investment Manager and Board do not consider this will change the positive fundamentals of the retail warehouse sector. It is expected to continue to be the most resilient and flexible part of the retail market, which can adapt to the changing needs of tenants and the integration of their omnichannel strategies.

According to the IPF Consensus Forecast, published in May 2022, the retail warehouse sector is forecast to be the top performing sub-sector, on a total return basis, over the period 2022 to 2026.

The Investment Manager is continuing to pursue opportunities in both the investment and occupational markets that are expected to benefit the Company on both a capital and income basis.

Portfolio sector weightings and tenant and locational exposure as at 30 June 2022

Sector

As at 30 June 2022, the 'other commercial/ leisure' exposure is Telford. Post period end, following the sale of the Telford leisure unit, the Company only holds retail warehouse assets.

Geography

The portfolio is diversified across the regional markets.

Top five tenants (contracted income) 30 June 2022

Forthcoming events

The next interim dividend announcement is expected to be made by 4 August 2022. The next scheduled independent quarterly valuation of the property portfolio will be conducted by Knight Frank LLP for 30 September 2022, the Company's year end. The unaudited NAV per share at that date is expected to be announced in October 2022.

The Company intends to publish its next factsheet shortly which will be made available on the Company's website at www.ediston-reit.com.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.

Enquiries

Will Barnett - Investec Bank plc 0207 597 5873

Calum Bruce - Ediston Investment Services Limited 0131 225 5599

Ruth Wright - JTC 0203 893 1011

Ben Robinson - Kaso Legg Communications 0203 995 6672

Stephanie Ross - Kaso Legg Communications 0203 995 6676