Helical Bar Regulatory News (HLCL)

13 July 2023

HELICAL PLC

("Helical" or the "Company")

Trading Update for the Period Since 1 April 2023

Ahead of its Annual General Meeting ("AGM") which will take place at 9:00am today, Helical provides an update covering its trading activity for the period 1 April 2023 to 12 July 2023 ("the Period").

Commenting on the Company's activities, Gerald Kaye, Chief Executive, said:

"Since the start of the financial year we have made good progress with our development pipeline, which totals almost 800,000 sq ft, of "best-in-class" office space to be delivered into an undersupplied market over the course of the next 5-6 years.

"With planning permission now formally granted at 100 New Bridge Street, EC4, we are on track to take vacant possession of the building in Q4 and commence a comprehensive refurbishment to create a carbon friendly building due to complete in Q2, 2025.

"Our joint venture with Transport for London ("TfL") has also seen progress with contracts signed earlier this week, confirming Helical as TfL's chosen development partner.

"On the letting front, we have one further floor under offer at The JJ Mack Building, EC1 and good interest in the remaining space."

Operational Performance

Development pipeline progressing with construction work at 100 New Bridge St to commence in Q4

· Planning permission has been granted for our next "best-in-class" comprehensive office refurbishment at 100 New Bridge Street, EC4, located adjacent to City Thameslink and the London Underground at Blackfriars Station as well as a short walk from the Elizabeth Line at Farringdon station. The carbon friendly building, to be completed in Q2 2025, will provide 192,000 sq ft of office space across 10 storeys, including two new floors which will benefit from exceptional views of St. Paul's Cathedral. Construction work is anticipated to commence in Q4 2023 once current office tenant Baker McKenzie vacates the building. The building will target BREEAM Outstanding, NABERS 5 Star, EPC A and WELL Platinum, as well as achieving the RIBA 2030 Built Target (A1-A5) of 475 kgCO2e/m2.

· Further to the announcement on 15 February 2023 that Transport for London ("TfL")'s wholly owned commercial property company had selected Helical as its preferred development partner for its sustainable commercial office portfolio across central London, contracts have now been signed confirming Helical as the joint venture partner. The partnership will see the delivery of new high-quality and sustainable office space above or close to London Tube stations, which currently consist of three new commercial office developments at Bank, Paddington and Southwark, totalling 600,000 sq ft. All three sites have full planning permission to deliver sustainable commercial office developments that provide exceptional workplaces and positively impact the local community. The three schemes are:

o Bank OSD - located above the recently opened Bank station entrance on Cannon Street. This eight storey office development will deliver 142,000 sq ft NIA and is scheduled to start on site in 2024.

o Southwark OSD - located above Southwark Tube station. The scheme has consent for a 220,000 sq ft NIA hybrid timber office building over 17 storeys. The development is expected to start on site in 2025.

o Paddington OSD - located on the Grand Union Canal, close to the Elizabeth Line station at Paddington. This 19-storey building will provide 235,000 sq ft NIA of office space and construction is expected to commence in 2026.

Leasing momentum maintained in line with ERVs

· In the Period we have completed four new lettings totalling 9,967 sq ft NIA, delivering contracted rent of £557,000 in line with 31 March 2023 ERVs. Lettings include:

o Three lettings totalling 7,443 sq ft NIA at The Loom, E1.

o The letting of a retail unit comprising 2,524 sq ft at The Bower, EC1 to pasta restaurant, Noci.

· At The JJ Mack Building, EC1 the 13,408 sq ft ninth floor is now under offer. The sixth and seventh floors of 37,880 sq ft are let to Partners Group, a leading private equity firm, and there is good interest in the remaining space. 

Final residential sale completed at Barts Square

· At Barts Square, EC1 we have completed the sale of the final residential apartment in this 236-unit residential scheme.

Continued strong rent collection

· As at 12 July 2023, we had collected 97.4% of the June quarter rent and expect to collect a further 1.5% via agreed payment plans, with the remaining 1.1% under discussion.

Financing

Sustainably Linked £400m Revolving Credit Facility ("RCF")

At 30 June 2023, the Group had drawn £230m under its RCF with an effective interest rate of 3.0% and a maturity of 3.1 years. The RCF benefits from interest rate swaps at an average of 0.9% plus margin on 100% of the drawn amount for the remaining term of the facility to July 2026.

Other Facilities

In our joint ventures, we had drawn £61.2m of the £69.9m (our share) facility with PIMCO to develop The JJ Mack Building, EC1. Following practical completion of the development on 30 September 2022, the effective interest rate on the loan is 4.2%, including commitment fees on the undrawn amount, reducing to 2.25% when fully let.

At 30 June 2023, the Group had c.£49m of cash and £189m of undrawn loan facilities with an overall weighted average cost of debt of 3.3% and an average maturity of 2.6 years.

Sustainability

We are progressing well against our sustainability commitment and in recognition of this were included in Financial Times’ list of Europe’s Climate Leaders, which ranks the top 500 companies in Europe that are delivering on their Climate Change commitments. Furthermore, we completed the first assessment period of the sustainability targets in our RCF and successfully met all three KPIs, resulting in a three basis point reduction in the margin for the next 12 months.

Dividend

The final dividend for the year ended 31 March 2023 of 8.70p, if approved by Shareholders at the AGM later today, will be paid on 28 July 2023. This will take the total dividend for the year to 11.75p (2022: 11.15p). 

For further information, please contact:

Schelical@fticonsulting.com