Helical Bar Regulatory News (HLCL)

18 February 2015

Helical Bar plc ("Helical" or the "Company")

Interim Management Statement for the period since 1 October 2014

HELICAL ROTATES ITS PORTFOLIO, SECURES MAJOR INVESTMENT AND DEVELOPMENT FINANCE AND SHOWS STRONG LETTING PROGRESS

AT KEY ASSETS

Helical Bar plc today announces its Interim Management Statement covering its activities for the period

1 October 2014 to 17 February 2015 ("the Period").

Highlights

· The rotation of our portfolio continues with £160m of sales, including £142m of shopping centres and high street retail and the purchase of over £133m of new investment assets, including distribution units, retail warehouses, regional offices and London offices.

· Sales of the shopping centres at Corby and Clydebank both exchanged for £71.7m and £70m respectively, a combined premium to book value of 4.4%. These sales conclude our rotation out of secondary retail and complete a strong performance from this asset class for Helical.

· Pre-sales at our first phase of residential units at Barts Square, London EC1 have remained strong with 65% sold. Construction started in January 2015.

· New banking facilities including a long term investment loan and major redevelopment finance taking advantage of current low interest rates.

· Good letting progress at The Bower, London EC1 with 42,798 sq ft let to Farfetch and John Brown Media at £40-£50.25 psf.

· Significant asset management activity with very strong rental growth continuing in London.

Commenting on the Company's activities, Michael Slade, Chief Executive, said:

"The period has been characterised by further successful rotation out of our shopping centres and into regional logistic facilities and offices. We remain very committed to London through development and new acquisitions such as Charterhouse Square and see further upside in this market."

Investment and Trading Portfolio

Purchases

Since 1 April 2014, the start of the financial year, we have purchased over £225m of investment properties in five portfolios and a series of smaller single asset transactions. Transactions since our half year end include:-

· In November 2014, we acquired, in separate transactions, a distribution unit in Wolverhampton for £3.9m, representing an 8.75% NIY and a 200,000 sq ft twin unit distribution facility in Leighton Buzzard for £9.9m, representing an 8.0% NIY.

· In December 2014, we acquired a retail warehouse in Ellesmere Port, Cheshire for £5.33m reflecting a NIY of 7.1%. This 36,250 sq ft warehouse is let for eight years to B&Q.

· In December 2014, we acquired two portfolios for £46.6m, representing a NIY of 7.9%. The Sun Portfolio comprised three single let distribution units and two multi let industrial estates, a total of 11 units comprising 266,172 sq ft fully let to nine tenants with a WAULT of 5.95 years to expiry. The Mint Portfolio comprised three retail warehouses and five high street retail assets comprising 167,923 sq ft fully let with a WAULT of 7.23 years to expiry.

· In December 2014, we also acquired the 4:2 Portfolio, four office properties of 82,170 sq ft and two industrial properties of 125,000 sq ft, for £22.1m reflecting a NIY of 8.3%. One office in Southampton was simultaneously sub-sold.

· In December 2014, we acquired the London Road Retail Park, Southend-on-Sea for £15.7m reflecting a NIY of 7.1%. The retail park comprises three units of 74,954 sq ft fully let to Homebase, Currys/PC World and Pets At Home.

· In December 2014, we acquired The Glashaus, a 22,000 sq ft office building in Cobham, Surrey for £5.85m reflecting a NIY of 7.85% and a 52,368 sq ft distribution warehouse in Brownhills, Walsall let to Norbert Dentressangle for £2.6m reflecting a NIY of 8.25%.

· In January we acquired a 28,970 sq ft retail park in Scarborough for £5.56m, a 7% NIY. The property is let to Currys/PC World and Carpetright.

Sales

Since 1 April 2014, we have sold over £195m of investment properties with transactions since our half year end including:-

· In February 2015 we sold the freehold of Corby Town Centre for £71.7m, a yield of 7.25%. This represents a premium of 5% to book value. The 700,000 sq ft scheme, comprising Willow Place, Corporation Street and Oasis Retail Park, was acquired in October 2011. During its ownership Helical disposed of £2.8m of individual units at the shopping centre.

· In February 2015 we sold the long leasehold interest in Clyde Shopping Centre, Glasgow for £70m, reflecting a net initial yield of 7.25% and a premium to book value of 3%. Helical acquired the 600,000 sq ft centre in joint venture with Prime Commercial Properties in January 2010, with Helical holding a 60% economic interest. During its ownership the joint venture has concluded a number of refurbishment and extension works, including the addition of a new gym and, in 2013, disposed of the adjoining Asda unit to Aviva for £12.15m.

· In November 2014, we sold The Idlewells Shopping Centre in Sutton-in-Ashfield for £16.1m and a 70,000 sq ft retail parade in Basildon for £9.65m, both at 30 September 2014 book values.

· We have also sold an office in Botleigh Grange Southampton for £4.5m, an industrial unit in Leicester for £5.2m (originally acquired as part of the Constellation Portfolio in April 2014), a 29,000 sq ft vacant industrial unit in Rugby for £1.5m and a multi-let industrial estate in Slough for £0.9m, together with a pub in Redditch for £1.5m and two portfolio sub-sales in Southampton and Colchester for £3.5m and £1.5m respectively - all at or above book value.

Asset Management

There have been a number of asset management highlights within the portfolio including:-

· Commencement of the refurbishment works at Artillery Lane, a 17,000 sq ft office/restaurant in the City of London.

· Works have started to refurbish one floor and add an extra floor to 1-15 King Street, Hammersmith.

· Refurbishment works have commenced on two units (8,000 sq ft) at The Shepherds Building, London W14. A new five year lease with Endemol has been signed on 13,000 sq ft at a new record rent for the building of £47.50 psf.

· Refurbishment works have commenced at New Loom House, London E1 and two new lettings agreed at £37.50; a new headline rent for the building.

· The refurbishment of The Creative Quarter, new office space at The Hayes in Cardiff, is nearing completion with good occupational take up in the 12,000 sq ft of offices created.

· Two new leases have concluded at Churchgate and Lee House in Manchester totalling £346,000 of rent over 21,300 sq ft. The building is now 87% let.

· The lease to Morrisons has completed at Leisure Plaza, Milton Keynes.

· At our 45,000 sq ft industrial unit in Rugby we have signed a new ten year lease at £5.25 psf.

Development Programme

· On 5 January, we started on site at our mixed use development at Barts Square, London EC1, which we are undertaking in joint venture with The Baupost Group LLC. The first phase comprises 144 residential units of which 88 have been released to the market with 51 contracts exchanged and six further units under offer (65% sold). This first phase, funded in a £165m development facility with HSBC, also includes 24,000 sq ft of office accommodation, retail/restaurant space and accompanying public realm improvements. The remaining phases of the scheme, comprising 202,000 sq ft of office space and 82 residential units will commence once vacant possession is obtained in 2016.

· At The Bower, Old Street, London EC1 our joint venture with Crosstree Real Estate Partners, we are on track to complete the first phase of the comprehensive redevelopment of the properties in the scheme in June 2015.

The current letting position is as follows:-

A further 7,500 sq ft of A3 retail space is under offer to three different tenants. In addition, we have let 10,767 sq ft of basement space to Gymbox at £160,000 pa. Phase two of the scheme, comprising 178,000 sq ft of office space is expected to start in summer 2015.

· In December 2014 we exchanged contracts to acquire a long leasehold interest in 23-28 Charterhouse Square, London EC1, an existing office building of 34,000 sq ft adjacent to Farringdon East Crossrail Station, for £16m. A planning application will be made shortly for a major refurbishment of the building to include an additional 8,000 sq ft.

· At 1 Creechurch Place, London EC3 construction continues with completion of the 272,000 sq ft building due September 2016.

· At C-Space, London EC1 works continue on a comprehensive refurbishment of the existing building increasing the NIA from 50,000 sq ft to 62,000 sq ft. Works are due to complete in the summer.

· In Glasgow, we have been awarded the contract to complete the fit-out of Scottish Power's headquarters which we are developing for them. The building is due to be completed at the end of this year.

Financing

Since 30 September 2014, we have:

· Signed a new £81m ten year investment facility with Aviva Commercial Finance, refinancing £27m of existing debt and boosting cash reserves by £54m. The terms of the facility, repayable in December 2024, allow drawdowns of up to 63% of value and the loan benefits from a fixed interest rate of 3.48%.

· In joint venture with our partners The Baupost Group LLC, at Barts Square, we secured a new £165m revolving credit facility with HSBC to refinance investment assets, currently let on short term leases to the NHS, and provide funding for the construction of phase 1 of the scheme comprising 144 residential units, 24,000 sq ft of offices, retail restaurant space and accompanying public realm improvements.

· Extended the £75m revolving credit facility with Barclays to November 2019.

At 31 January 2015, the Company's bank facilities comprised:

· £395.3m of investment facilities of which £341.9m was drawn down. These borrowings have an average maturity date of four years ten months and a weighted average cost of debt of 3.9%.

· £68.3m of site acquisition and development facilities of which £46.7m was drawn down, leaving £21.6m to fund the retirement village development programme and future site acquisitions. These borrowings have an average debt maturity date of two years and one month and a weighted average cost of debt of 3.9%.

· A share of bank facilities in joint ventures of £130.0m of which £82.0m was drawn down. These facilities have an average maturity date of two years and seven months and a weighted average cost of debt of 4.9%.

Including the £80m retail bond and the £100m convertible bond, Helical's share of net debt as at 31 January 2015, including debt and cash held in joint ventures, was £596.1m (30 September 2014: £482.4m), with an average maturity date of four years and four months (30 September 2014: three years and six months) and a weighted average cost of debt of 4.3% (30 September 2014: 4.7%). Of the borrowings, £534m (82%) is fixed at an average rate of 4.6% with the remaining £118m (18%) floating at an average rate of 3.3%. The Company has £132m of interest rate caps protecting it against base rate rises up to a weighted average of 4%.

Helical's loan to value, based on 30 September 2014 valuations plus acquisitions at cost, less sales in the period including Corby Town Centre and Clyde Shopping Centre, is 54% (30 September 2014: 53%).

Board Changes

Jack Pitman, who joined the Company in January 2001 and made an executive director in August 2007, has stepped down from the Board and will leave the Company on 31 March 2015. We would like to take this opportunity to thank Jack for his significant contribution to the Company over the last 14 years. He has played an important part in the growth of the investment portfolio and in our retirement villages business and we wish him every success in the future.

Andrew Gulliford, who joined the Board as a non-executive director in April 2006, has stepped down as Chairman and member of the Remuneration Committee and as a member of the Audit and Nominations Committees. He will remain on the Board as a non-executive director and will continue to advise the Board on property matters. Michael O'Donnell, who was appointed as a non-executive director in June 2011, has been appointed Chairman of the Remuneration Committee.

For further information, please contact: