Helical Bar Regulatory News (HLCL)

13 February 2012

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

Interim Management Statement for the period since 30 September 2011

FURTHER PROGRESS IN OPERATIONAL AND FINANCING ACTIVITIES

Helical today announces its interim Management Statement covering its activities for the period since 30 September 2011.

Highlights

·; The Company continues to add to its investment portfolio with acquisitions totalling £90m completed since 30 September 2011. Its programme to dispose of non-income producing assets continues to generate momentum with circa £40m of sales during the period.

·; Acquisition activity, new lettings and a strengthening of existing rental income levels across the portfolio have increased annual rental income, net of irrecoverable property costs, from £20.0m pa to £25.8m pa since 30 September 2011.

·; £133m of new bank facilities agreed since September 2011 including a £100m revolving credit facility with The Royal Bank of Scotland.

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

"We have continued to make substantial progress in identifying and acquiring assets with the potential to provide future capital and income growth as well as with our drive to recycle capital from our existing portfolio. Our development programme remains on course with planning consents achieved on a number of key projects. Furthermore, our ability to secure new finance against a backdrop of severely constrained lending is a testament to the continued momentum Helical has delivered over the period."

Acquisitions and disposals

Purchases totalling circa £90m completed

·; In October we acquired land and buildings in Corby Town Centre for circa £70m, reflecting an initial yield of 8%. Since acquisition we have completed six lease renewals, secured two new leases and concluded positive rent reviews with two tenants. These successes have negated the impact of the loss of Priceless Shoes through administration and the overall income remains in line with when the asset was acquired.

·; In November we acquired The Powerhouse, Chiswick, for £3.7m in a sale and leaseback arising out of the tenant's MBO. The property comes with a 25 year lease to the tenant with a 10% NIY on the expiry of the initial concessionary rental period in November 2012.

·; The Pavilion, Southampton. This 23,000 sq ft new office development was acquired for £2.4m from receivers in December 2011. The latest of six offices on the Hedge End Business Park, the property will be marketed as a headquarters building or, alternatively, separated into four separate office units.

·; In February we completed the purchase of Broadway House, King Street, Hammersmith from Joint Fixed Receivers for £14.1 million, reflecting a net initial yield of 5.7% and a targeted reversionary yield of 8.7%. The 35,000 sq ft multi-let investment is arranged as retail on the ground floor with four floors of offices above. 70% of the income is well secured to retail tenants including Dolland & Aitchison, Lloyds TSB, Café Nero & Ladbrokes whilst the first and fourth floors are let to Kaplan Financial Ltd & Pakistan Airways. There are two vacant floors of offices which will be refurbished and let.

Sales of £40m during the period

·; At Europa Centralna, in Gliwice, Poland, the sale of 50% of this 66,000 sq m (710,000 sq ft) retail development to an institutional client of Standard Life has been completed, returning £16.5m to Helical. The scheme is under construction and is funded by a €72m loan from Aareal and €40m equity, of which €4m is provided by Helical. The scheme is expected to complete in October 2012 and is currently over 50% pre-let to Tesco, Castorama, H&M and others.

·; Terms have been agreed to sell a 9,600 sq m (103,000 sq ft) retail development in Wroclaw, completed in 2009, at a price just above book value.

·; At Bramshott Place, Liphook, we have now exchanged or completed the sale of 85 cottages and apartments in the retirement village with a further 19 units in solicitors' hands out of a total of 151 units.

·; Sales of the remaining units at our industrial development at Scotts Road, Southall, for £1.4m, have been completed at just above book value.

Development Programme

Progress on planning consents and site assembly

·; We achieved planning consent at our industrial scheme at Stockport for a car dealership and a reconfiguration of the space. Upon expiry of the judicial review period, the sale of the car dealership land to Sytner will complete at its book value of £2.5m.

·; At Parkgate, Shirley, where we have a 50% interest, the CPO is being implemented to complete the site assembly. Construction of this scheme is due to start in Spring 2012 and will comprise a foodstore, pre-sold to Asda, 72,000 sq ft of retail units and 83 residential units including 26 town houses. Completion is scheduled for late 2013/early 2014.

·; At Cortonwood, Rotherham, we have exchanged contracts, subject to planning, for a 96,000 sq ft open A1 retail warehouse scheme, an extension to an established retail park.

·; At Tyseley, Birmingham, we have submitted a planning application for an Asda foodstore and 70,000 sq ft of non-food retail.

·; At Barts Square, London EC1, we have completed the pre-planning application consultation phase of a redevelopment of the site and expect to submit a detailed planning application this month for circa 240,000 sq ft of offices, 220,000 sq ft residential and 27,000 sq ft of retail / restaurant space.

·; At the Dairy Crest Site, Wood Lane, White City, the masterplanning team has made good progress towards settling on an outline design approach. We hope to submit a planning application by the summer of 2012 with a view to obtaining planning by the end of the year for a circa 1.5m sq ft residential led mixed use scheme.

Other

·; At Fulham Wharf, London SW6 (100,000 sq ft Sainsbury's, 463 residential units), the marketing process is well underway and detailed discussions continue with bidders for this development site. We have received our initial £1.5m fee for obtaining a resolution to grant planning and expect to receive a further fee once the site is sold.

·; At Durrants Village, Faygate, Horsham, we have secured bank finance to undertake this phased retirement village development of 154 units. Marketing of the units is underway.

Asset Management

·; During the four months to 31 January 2012, we completed 18 new lettings, increasing our contracted income by £490,000pa. We also completed 24 lease renewals securing a total contracted rent of £690,000pa including £50,000pa of rental uplifts. However, this was offset by a reduction of £730,000 of annualised income through the loss of 13 tenants due to lease expiries (£520,000pa) and four tenants entering into administration (£210,000pa). This figure excludes Bon Marche and Peacocks who, whilst formally in administration, still occupy their units under existing leases. We are in discussions with both parties.

·; The purchases of Corby Town Centre; Broadway House, Hammersmith; The Powerhouse, Chiswick and The Pavilion, Southampton, in addition to the uplift of net rents from the existing portfolio have increased overall rental income, net of irrecoverable property costs, from £20.0m pa to £25.8m pa since 30 September 2011.

·; We continue to make solid progress at 200 Aldersgate, London EC1 (370,000 sq ft) with a further letting of circa 20,000 sq ft to ETC Venues, a leading provider of conference facilities. A total of 14 leases have been completed, comprising 112,000 sq ft of offices, in addition to 35,000 sq ft let in the basement to Virgin Active, as the home of their new UK flagship Virgin Classic Gym. Whilst the market was quieter in the last three months of last year, the level of viewings picked up in January and there are detailed discussions with several potential tenants.

Financing

·; The last four months have seen a gradual tightening of property lending, with a number of banks withdrawing from the market entirely. Against this backdrop we are pleased to have negotiated new refinancings with a number of banks. Since 30 September 2011, we have agreed a £100m revolving credit facility with The Royal Bank of Scotland, an investment facility with Barclays, a development facility with HSBC and have agreed terms to renew an investment facility with Nationwide. Of the £133m of new bank facilities, £106m is currently drawn down. We are currently in discussions with our banks in respect of existing loans which are due to be repaid in the next 12 months. Where such loans are not expected to be repaid out of the sales proceeds of the assets on which they are secured, we are confident that we shall reach agreement with regard to the renewal of the loans.

·; In order to capitalise on current low interest rates we have taken out £59m of interest rate swaps for an average of 3.1 years at an average of 3.95% including margin.

·; The Group's share of borrowings of £327m (30 September 2011: £265.4m) has an effective rate of interest of 4.1% (30 September 2011: 4.7%). Of these borrowings, 42% or £138m are fixed at an effective rate of 4.8% and £189m are floating at an effective rate of 3.5%. The Group's share of interest rate caps is £149m at an average of 4.8% (30 September 2011: £136m at 4.8%).

·; The average maturity of the Group's share of borrowings is 2.8 years (30 September 2011: 2.5 years).

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