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17 Nov 2011 07:00
17 November 2011
ALPHA UK MULTI PROPERTY TRUST PLC
(the "Company" or together with its subsidiaries the "Group")
INTERIM MANAGEMENT STATEMENT
Alpha UK Multi Property Trust Plc is today announcing an Interim Management Statement for the three months to
30 September 2011 and the period up until the date of this announcement. The information contained herein has not been audited.
Highlights:
·; Net Asset Value per Ordinary Share of 305 pence (318 pence at 30 June 2011)
·; Continued reduction in debt of £0.3 million during the quarter; a further £0.2 million has been repaid in October 2011
·; The loan to value ('LTV') on secured debt was 73.3 % at 30 September 2011
·; Excellent progress in letting of vacant units with 42 new lettings completed in the period
·; Ongoing portfolio review to identify value enhancement opportunities
"The Board believes that the Company's overall financial position, following the refinancing and new capital introduced last year, has been significantly strengthened. The Company holds significant cash with which to undertake targeted income and value enhancement asset management initiatives in the year ahead. In addition, the Board is actively considering options to enhance shareholder value and liquidity for our shareholders."
Revaluation and Net Asset Value
The Company's Net Asset Value per Ordinary Share was 305 pence as at 30 September 2011; this represents a decrease of 4.2% in Net Asset Value per Ordinary Share from that reported at 30 June 2011, principally as a result of the updated valuation on the property portfolio.
The Company's property portfolio was valued at 30 September 2011 by DTZ Debenham Tie Leung Limited at £109.6 million; this represents a £1.0 million (0.9%) fall on a like for like basis compared to the valuation at 30 June 2011. The property portfolio will next be valued by an external valuer at 31 December 2011.
Property Update
The Property Investment Adviser continues to progress the published strategy to deliver shareholder value namely:
·; To enhance net rental income
·; To deploy capital when 'value add' opportunities are identified
·; To undertake limited strategic sales
·; To amortise borrowing through rental surplus and to reduce the LTV
Occupancy across the portfolio has decreased marginally with void levels, based on the estimated rental value, standing at 24.4% at 1 October 2011 (reducing to 23.0% should completion occur for all lettings currently under offer). Whilst good progress continues to be made in letting void units, the Company has seen an increase in the number of tenant insolvencies and tenants failing to renew their leases. Despite these challenging market conditions, 42 new lettings have been successfully completed in the period at a final achievable annual rent, including stepped rent, of c£0.5 million per annum.
Tenant/letting activity can be summarised as follows:
Period 30 June to 30 September 2011 | Number of Tenants | Rent p.a £ | As % of annual Estimate Rental Value |
Tenant lease breaks exercised | 3 | 67,052 | 0.58% |
Tenant vacated at lease end | 22 | 365,118 | 2.87% |
Tenant insolvency | 4 | 139,535 | 1.10% |
New lettings completed | 42 | *499,587 | 3.93% |
Tenant leases renewed | 7 | 64,727 | 0.51% |
*Final achievable annual rent including stepped rent | |||
Financing
During the quarter to 30 September 2011, the Company reduced borrowings by a further £0.3 million. An additional repayment of £0.2 million was made in October 2011 bringing total debt repayments in the year to date to £1.9 million. As a result of these loan repayments, the total secured debt of the Company has been reduced to £80.1 million.
The LTV of the Group's secured debt was 73.3% at 30 September 2011 (or 73.1% following the October 2011 repayments).
As previously reported to shareholders, terms are being negotiated with Nationwide regarding its loan facility to CHIP (Six) Limited, to resolve the current breach of loan covenants.
Discussions with Nationwide Building Society to date have yet to reach resolution. However discussions are continuing and the Company shall provide to shareholders a further update in due course. It is important to note that, whilst CHIP (Six) Limited accounts for 18% of the Company's property portfolio by value as at 30 September 2011, due to the relatively high level of gearing, the associated contribution to the Company's overall NAV is only 0.2%. CHIP (Six) Limited's borrowings are not cross collateralised with any Group borrowings or subject to any Group guarantees.
Contact:
Jonathan ClagueChairman, Alpha UK Multi Property Trust Plc+44 (0) 1624 681250Tom PissarroFund Manager, Alpha Real Capital LLP +44 (0) 20 7268 0300
For more information on the Company please visit www.alphaukmultipropertytrust.com.
For more information on the Company's Investment Manager please visit www.alpharealcapital.com.
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