Helical Bar Regulatory News (HLCL)

RNS Number : 9190K

Helical PLC

13 July 2017

 

13 July 2017

 

Helical today releases an update covering its trading activities for the period 1 April 2017 to 12 July 2017 ("the Period").

 

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

 

"I am pleased to report continued success in meeting our milestones and an increased focus of the business on London, offices in Manchester and logistics.

 

"Since 1 April 2017 we have received planning consent at Power Road Studios, London W4 and Evesham for new schemes. These projects add to our potential to create valuation gains and development profits across our portfolio. We have sold a further 11 residential units at Barts Square, London EC1 during the period. This means that almost 90% of the first phase of 144 units has been sold, several months before completion of the first units.

 

"In Manchester, we completed the purchase of Trinity Court for £12.9m for future redevelopment, taking our ownership in the city to four buildings with an end value of circa £100m, once all asset management is completed. Our logistics portfolio comprises 25 buildings where there are several asset management opportunities in the near future.

 

"In our non-core portfolio, we have reduced our retail investment holdings to just one property with three regional offices also remaining. Sales at the retirement village portfolio have continued to perform strongly and construction is progressing well.

 

"As announced yesterday, Duncan Walker has stepped down from the Board with immediate effect. On behalf of the Board I would like to thank Duncan for his significant contribution to the Company over the last ten years, the last six as an Executive Director. He has played a key part in the growth of our investment portfolio and, latterly, in the development of our retirement village business. We wish him every success for the future."

 

Highlights

 

· Resolution to grant planning permission secured at Power Road Studios, London W4, for a new 30,000 sq ft office building and a 12,500 sq ft new floor on an existing building;

 

· The sale of an additional 11 residential units at Barts Square, London EC1 since the end of the last financial year with five sold since our annual results were announced in May;

 

· Sales of three retail assets at Cardiff, Great Yarmouth and Southend-on-Sea for a combined £73.3m, a premium of 5.6% to 31 March 2017 book values;

 

· Trinity Court, Manchester was acquired in May 2017 for £12.9m with a complete refurbishment of the building planned for 2018/19; and

 

· Planning consent granted at Evesham for a 41,000 sq ft retail development.

 

 

London Portfolio

 

Our London portfolio provides rental income, opportunities for capital growth and development profits.

 

The Bower, EC1

At The Bower, Old Street, EC1:

 

· Phase 1 of the scheme, comprising 151,000 sq ft of offices, has already been fully let to CBS, Farfetch, Pivotal, Allegis and Stripe (The Warehouse) and John Brown Media (The Studio); and

 

· Phase 2 of the scheme, the refurbishment of The Tower, continues to progress and will deliver a further c. 171,000 sq ft of offices and c. 7,500 sq ft of restaurant use. It is due for completion in Q2 2018 and floors one to six totalling 59,000 sq ft have already been pre-let to WeWork.

 

Barts Square, EC1

At Barts Square, EC1:

 

· In the first phase of 144 residential units, we have exchanged contracts on 123 units, with a further four units placed under offer, for a combined total sales value of £160.5m at an average of £1,566 psf, with delivery expected in Q3-Q4 2017. Five units have been sold since our Annual Results to 31 March 2017 were announced on 25 May 2017;

 

· 90 Bartholomew Close, an office refurbishment of 24,300 sq ft, is due for completion in Q4 2017;

 

· The construction of One Bartholomew Close, a new 12 storey office building of c. 213,000 sq ft pre-sold to clients of Ashby Capital LLP, continues with completion due Q3 2018; and

 

· Demolition continues of existing buildings to allow construction of the remaining phase of residential, comprising an additional 92 units.

 

One Creechurch Place, EC3

At One Creechurch Place, EC3, we have significant interest from a number of potential tenants interested in leasing space on the majority of this 273,000 sq ft building.

 

25 Charterhouse Square, EC1

At 25 Charterhouse Square, EC1, tenants Anomaly and Peakon have completed their fit outs in anticipation of moving in to the building this month. Having achieved rents of £75 psf on the top three floors we are optimistic about achieving similar rents on the remaining three floors.

 

Power Road Studios, W4

Planning consent has been granted for a 42,500 sq ft extension comprising a new build 30,000 sq ft office building in the car park and a 12,500 sq ft new floor on top of Studio 1. The refurbishment of the space, previously occupied by Cineworld, is due to complete at the end of August and we have terms out on one of the studios at £42.50 psf.

 

The Loom, E1

At The Loom, Whitechapel E1 we have completed two lettings totalling 3,500 sq ft at rents of £52.50 psf. 22,000 sq ft remains available to let.

 

Manchester Offices

 

· Churchgate & Lee House remains fully let. Asset management during the period included an 18 month lease extension with UCI on 27,000 sq ft of space;

 

· A refurbishment programme is underway at Dale House on 28,000 sq ft of office space. The 5th floor (7,500 sq ft) was let to Flatshare at a new headline rent for the building of £18 psf;

 

· The refurbishment of 31 Booth Street is now complete. The building was launched to the market in March 2017 and viewings are ongoing; and

 

· We completed the purchase of Trinity Court, for £12.9m reflecting a net initial yield of 9.25%. The office offers immediate income for one year followed by the opportunity for full redevelopment in 2018.

 

Logistics 

 

Our logistics portfolio comprises 25 distribution and logistics units located around major UK transport networks. The majority of these units are single let with just one vacant unit. During the period our 65,000 sq ft unit at Telford was re-geared on a 10 year lease at the previous passing rent. Various breaks and lease ends are coming up over the next 18 months and will provide opportunities for asset management initiatives.

 

Non-Core

 

Retirement Villages

 

· The retirement village business has continued to perform strongly with completed sales of 12 units for a total value of £5.1m. In addition, sales of five units have exchanged (value of £2.4m) and a further 17 units have been reserved (value of £8.1m); and

 

· Construction is progressing well with 119 units and the resident's clubhouse completed at Millbrook Village, Exeter and the remaining 45 units under construction. At Durrants Village, Faygate, 105 units are built with construction of the final 68 underway. The construction of the first 45 units are progressing well on site in Maudslay Park, Great Alne. At Bramshott place, Liphook, the final phase of 40 units are all under construction and progressing well with the show homes to be unveiled in August.

 

Retail

Since 1 April 2017 we have:

 

· Sold the Morgan Quarter, Cardiff for £54.9m reflecting a net initial yield of 5.9% and a reversionary yield of 6.9%;

 

· Sold our retail warehouses at Great Yarmouth and Southend-on-Sea for £4.2m and £14.2m respectively;

 

· These retail sales were at a premium of 5.6% to 31 March 2017 book values and leaves our retail warehouse at Sevenoaks as the only remaining retail investment in the portfolio;

 

· At Cortonwood, our retail park development, forward funded with clients of Aberdeen Asset Management, achieved practical completion in July 2017; and

 

· At Evesham, our 41,000 sq ft retail development received planning consent and consideration will be given to the sale or forward funding of this development.

 

Financing

 

There are no secured facilities due for repayment or refinancing before November 2019.

 

At 30 June 2017, the Company's bank facilities comprised:

 

· £570m of investment facilities of which £450m was drawn down. These borrowings have an average maturity date of three years and five months and a weighted average cost of 4.3%;

 

· £60m of development facilities of which £40m was drawn down, leaving £20m to fund the retirement village development programme. These borrowings have an average debt maturity date of three years and one month and a weighted average cost of 3.9%; and

 

· A share of bank facilities in joint ventures of £72m of which £63m was drawn down. These facilities have an average maturity date of two years and six months and a weighted average cost of 3.4%.

 

Net loan to value ("LTV") based on values at 31 March 2017 and including our retail and convertible bonds is 50%.

 

Dividend

 

The final dividend for the year ended 31 March 2017 of 6.20p, if approved by Shareholders, will be paid on 21 July 2017. This will take the total dividend for the year to 8.60p.

 

Board Matters

 

As announced yesterday, Duncan Walker has stepped down from the Board with immediate effect. As a consequence, resolution 7 at today's AGM, which seeks to re-elect him as a Director, has been withdrawn. Duncan will cease carrying out his day-to-day activities but will remain available in an advisory capacity with regard to the Company's retirement villages and regional investment portfolios until the expiry of his notice period.

 

 

 

 

For further information, please contact:

 

Helical plc
Gerald Kaye (CEO)	Address: 5 Hanover Square, London W1S 1HQ
Tim Murphy (Finance Director)	Website: www.helical.co.uk Tel: 020 7629 0113
FTI Consulting
Dido Laurimore/Tom Gough/Richard Gotla	Tel: 020 3727 1000

 

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