Helical Bar Regulatory News (HLCL)

13 February 2014

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

Interim Management Statement for the period since 1 October 2013

STRONG PROGRESS IN DELIVERING LONDON DEVELOPMENT AND REFURBISHMENT PROGRAMME

Helical Bar plc today announces its Interim Management Statement covering its activities for the period 1 October 2013 to 12 February 2014 ("the Period").

Highlights

· Next phase of value creation well underway with London office schemes at Old Street EC1, Clifton Street EC2 and Maple House EC1 all on site or commencing imminently.

· £82m of new acquisitions and a £21m forward commitment on Clifton Street concluded.

· £20m of sales including TK Maxx, Cardiff (13% above 31 March 2013 book value) and retirement village units.

· Financing in place for Old Street, Maple House and Corby Town Centre works.

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

"The London office development programme will provide the potential for substantial additional profit in the next few years alongside our mixed-use scheme at Barts Square, London EC1, which is due to commence in January 2015.

"Our investment portfolio meanwhile is focused on London, where rents are showing good growth, and regional shopping centres, both sectors which are benefitting from increased investor interest.

"We have acquired properties for a total cost of c. £160m since April 2013 and anticipate a good level of value creation from these assets in the medium to long term. We continue to look for other assets to grow the investment portfolio and have a further £100m of firepower available to achieve this."

Investment and Trading Portfolio

Purchases

· In October we acquired the freehold of Enterprise House, Paddington, London W2 for £31m through a sale and 20 year leaseback with Network Rail Infrastructure Limited, representing a net initial yield of 5.7%.

· In November we committed to forward purchase in Q3 2015 a new 43,000 sq ft office building on Clifton Street, Shoreditch, London EC2 for £21m.

· In December we completed the acquisition of the Quartz portfolio, comprising nine regional properties for c. £44m at an 8.2% net initial yield. One asset in Nottingham was sub-sold to its occupier for £7.2m.

· In December we also acquired Artillery Lane, London E1, an office building with refurbishment potential, for c. £7m.

Since 1 April 2013, we have completed the purchases of £160m of new investment and trading properties with a total passing rent of c. £9.4m, representing an overall net initial yield of 5.7% (7.9% for regional assets and 5.1% for central London assets excluding Maple House which is vacant pending refurbishment and extension).

Sales

· We have sold the 68,477 sq ft TK Maxx unit at The Morgan Quarter, Cardiff for £14.8m, 13% above 31 March 2013 book value. We retain ownership of the remainder of our holding here.

· During the Period, we completed the sale of 11 units at our retirement village at Bramshott Place, Liphook, for £4.6m, bringing the total completed sales to 134 units out of 151 units with a further five reserved.

· At our retirement village in Durrants Village, Horsham, we completed the sale of two units, have exchanged on a further five sales and have reservations on a further nine units (total value of £7.7m), out of the first phase of 43 units under construction. Site works have now started at Great Alne, Warwickshire and at Exeter.

Asset Management

· At Shepherds Building, London W14, we are close to completing the £1.5m refurbishment of the reception, bar and common parts and anticipate good rental growth. The building is 97% let.

· 1 King Street, Hammersmith W6 is now fully let having completed a new five year lease of the second floor at £33.50 per sq ft to Pay and Shop Limited. We have also completed a lease renewal with an existing occupier at £32.50 per sq ft and secured planning permission for a 3,500 sq ft NIA extension on top of the building which will increase the total space at the building to 38,650 sq ft.

· Rent reviews have been concluded with Molton Brown and White Stuff at The Hayes in Cardiff, with a combined uplift of £77,500 pa.

· At The Hub, Glasgow, we now have c. 98% occupancy, having concluded 20 leases within the last 12 months.

Development Programme

· In November the Company, in joint venture with Grainger plc, obtained a resolution to grant planning consent for the £150m regeneration scheme of King Street, Hammersmith W6. The redevelopment will provide 196 residential units, a cinema, new retail, restaurant and café space, replacement offices for the council and a new town square.

· In January, work started on the £36m refurbishment and extension of 211 Old Street, London EC1. Due to complete in March 2015 these works will deliver a refurbished and extended office building of c. 127,000 sq ft plus 21,000 sq ft of new space.

· At Clifton Street, London EC2, where we have concluded a contract to acquire the building upon completion of the development, demolition is almost complete and construction is about to commence.

· At Mitre Square, London EC3, we have completed demolition of the existing buildings and anticipate starting the new building later this year, having identified a financial partner.

· At Maple House, London EC1, we have received a resolution to grant planning consent for our refurbishment of the building to provide c. 61,000 sq ft of office space. Work is expected to be completed by Spring 2015.

· At Cawston, Rugby, we have received a resolution to grant planning consent for up to 250 open market homes on our 32 acre site.

Financing

Since 30 September 2013, we have:

· Signed a new £98m five year investment facility with PBB Deutsche Pfandbriefbank, refinancing £46m of existing debt and the recent cash acquisitions at New Loom House, London E1, Maple House, London EC1 and Artillery Lane, London E1, boosting cash revenues by £29m. The facility will also finance £23m of refurbishment works at Maple House and an extension to the shopping centre at Corby Town Centre.

· Utilised £50m of revolving credit facilities to acquire the Quartz portfolio and Enterprise House, London W2.

· In joint venture with our partners Crosstree Real Estate Partners, we have signed a new £88m three year facility with Deutsche Bank to fund phase 1 of the refurbishment of our interests at 207-211 Old Street, London EC1.

· In joint venture with clients of Standard Life, we have converted our €72m development facility with Aareal Bank on our shopping centre and retail park at Europa Centralna, Gliwice, Poland into a four year investment facility.

At 31 January 2014, the Company's bank facilities comprised:

· £326.8m of investment facilities of which £257.6m was drawn down, leaving £69.2m to fund future acquisitions and refurbishment works at Corby Town Centre, Corby and Maple House, London EC1. These borrowings have an average maturity date of 3 years 11 months and a weighted average cost of debt of 4.0%.

· £60.5m of site acquisition and development facilities of which £36.7m was drawn down, leaving £23.8m to fund the retirement village development programme and future site acquisitions. These borrowings have an average debt maturity date of 3 years and 1 month and a weighted average cost of debt of 3.6%.

· A share of bank facilities in joint ventures of £89.7m of which £72.0m was drawn down. These facilities have an average maturity date of 2 years and 6 months and a weighted average cost of debt of 4.6%.

Including the £80m retail bond, Helical's share of net debt as at 31 January 2014, including debt and cash held in joint ventures, was £383m (30 September 2013: £274m), with an average maturity date of 4 years (30 September 2013: 3 years and 6 months) and a weighted average cost of debt of 4.5% (30 September 2013: 4.5%). Of the borrowings, £321m (72%) is fixed at an average rate of 4.9% with the remaining £126m (28%) floating at an average rate of 3.6%. The Company has £145m of interest rate caps protecting it against base rate rises up to a weighted average of 4.1%. Helical's loan to value at 31 January 2014, based on 30 September 2013 valuations plus acquisitions at cost, was 50% (30 September 2013: 40%).

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