Last checked at 21 Jul 2010 07:00
Helical Bar plc ("Helical" or the "Company")
Interim Management Statement for the first quarter to 30 June 2010
Market Update:
Since reporting to shareholders in the preliminary announcement of 3 June 2010, there has been further evidence to support our view that the previous strong recovery in property values is stalling. Whilst we are actively considering a number of potential acquisition opportunities, Helical will remain selective, only seeking to purchase those properties which we believe will offer exceptional growth or income potential.
Key activity:
Acquisitions and disposals
·; In June we completed a portfolio acquisition of seven industrial estates and two offices for circa £50m, whilst simultaneously sub-selling two of the industrial estates for £15.8m. The residual portfolio yields 10.5%.
·; At Mitre Square, London EC3 legal agreements were signed to acquire the site from the City of London and Ansbacher. A planning application for a new high quality office building of 270,000 sq. ft. has been submitted.
·; At Fieldgate Street, London E1 we have completed the sale of the site for its book value of £16.5m.
·; At Riverbank House, London EC4, where we acted as development managers for the City of London and Pace Investments, the building achieved practical completion and was handed over to the Man Group for their fit out. We received a profit related fee in June.
·; At Bramshott Place, our retirement village development in Liphook, progress on sales continues to be encouraging. We have exchanged or completed on 37 units (£14.3m) and a further 27 units (£11.4m) are under offer.
·; At our industrial developments we have completed £3.0m of sales with a further £250,000 exchanged.
·; At Stockport we have started on site on the infrastructure works which will be completed by the end of 2010. This will enable Big Yellow to start on its 0.8 acre site in October and allow completion of a sale of 2 acres to Infiniti for £1.75m. Marketing of the remaining 7.8 acres is progressing well with the intention of selling plots, or design and build units.
Asset Management and Development
·; During the quarter we completed 15 lettings, increasing our annualised income by £300,000, the largest of which was at Unit 1, Oakwood Business Park, Hailsham, where we let 23,500 sq. ft. to Constables Ltd for £100,000 per annum.
·; Since we acquired the Clyde Shopping Centre, Clydebank, in joint venture with Prime Commercial Properties, we have completed numerous short and long-term lettings. Terms have been approved on £400,000 of lettings, renewals and tenant relocations.
·; In addition to these lettings, we have completed an Agreement for Lease with Urban Outfitters for the majority of the space vacated by Borders at the Morgan Department Store, Cardiff and agreed terms with a national retailer for the remainder for an aggregate rent of almost £500,000 per annum, an increase of 25% over the rent previously receivable from Borders.
·; We have also completed a further 15 lease renewals, securing £370,000 of annual rent. This included eight renewals at the Hub, Glasgow and four renewals at Shepherds Building. During the quarter eight tenants vacated their properties with a consequent loss of rent of £258,500. Excluding new purchases, but including fixed uplifts in rent, we added £83,000 to our annualized rent roll during the period.
·; Refurbishment works are progressing well at 200 Aldersgate with planned completion at the end of October, following which an innovative marketing campaign will be carried out with the aim of capitalising on the predicted shortage of large floorplate office space in the City of London.
Poland
·; At our retail development at Wroclaw, the planned sale to a private property investment fund is progressing.
·; Construction work continues at Opole, our retail development, forward sold to Standard Life with a planned opening of Spring 2011. Discussions continue with prospective tenants and the scheme is now nearly 60% let, with discussions in progress on additional space.
·; At Europa Centralna, Gliwice, Tesco has signed a pre-let agreement for 10,102 sq. m. (107,737 sq. ft.) to act as anchor tenant at this 67,000 sq. m. (720,000 sq. ft.) retail development.
Commenting on the Company's activity, Michael Slade, Chief Executive, said:
"We can report good operational progress across all areas of the business. We find ourselves in the happy situation of having both cash and bank facilities available, whilst at the same time we are seeing more and more opportunities. We will only target those assets where we can deliver exceptional capital value and income growth. Our active asset management programme continues, illustrated by a number of new lettings and lease renewals, which will significantly increase our annualised rent roll.
"Whilst the outlook for commercial property remains uncertain, we believe that now is the right time to selectively progress our development pipeline, especially in Central London offices and larger residential projects, where we expect to see outperformance."
For further information, please contact:
| Helical Bar plc Michael Slade (Chief Executive) Nigel McNair Scott (Finance Director)
Address: 11 - 15 Farm Street, London, W1J 5RS Fax: 020 7408 1666 Website: www.helical.co.uk | Tel: 020 7629 0113 |
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| Financial Dynamics Stephanie Highett/Dido Laurimore/Laurence Jones | Tel: 020 7831 3113 |