11 May 2016 07:00
STANDARD LIFE INVESTMENTS PROPERTY INCOME TRUST LTD - Net Asset ValueSTANDARD LIFE INVESTMENTS PROPERTY INCOME TRUST LTD - Net Asset Value
PR Newswire
London, May 10
11 May 2016
STANDARD LIFE INVESTMENTS PROPERTY INCOME TRUST LIMITED (LSE: SLI)
Unaudited Net Asset Value as at 31 March 2016
Key Highlights
Net asset value per ordinary share was 82.3p as at 31 March 2016, an increase of 0.1% from 31 December 2015 resulting in a NAV total return of 1.5% for Q1; The portfolio increased by 0.1% on a like for like basis which compares favourably to the quarterly capital return on the monthly IPD Monthly Index capital return over the quarter (fall of 0.2%); The increase in stamp duty land tax announced in the March 2016 budget resulted in a £3.5 million reduction in valuations across the portfolio; excluding this the portfolio showed a like for like increase of 0.8%; On 28 April 2016, the Company announced a debt refinancing resulting in a new seven year term loan facility of £110 million and a revolving credit facility of £35 million at a current blended rate of interest of 2.5%, and a LTV of 29.5%; Share price total return of 2.2% over the quarter as the Company’s shares continue to trade at a premium to NAV. This return compares favourably to the total return on both the FTSE All-Share Index (-0.4%) and the FTSE REIT Index (-5.7%); Based on new dividend rate of 1.19p per quarter, dividend yield of 5.5% based on share price of 86.25p (31 March 2016) comparing favourably to the yield on the FTSE All-Share REIT Index (3.3%) and the FTSE All Share Index (3.8%) as at the same date.Net Asset Value (“NAV”)
The unaudited net asset value per ordinary share of Standard Life Investments Property Income Trust Limited (“SLIPIT”) at 31 March 2016 was 82.3p. The net asset value is calculated under International Financial Reporting Standards (“IFRS”).
The net asset value incorporates the external portfolio valuation by Jones Lang LaSalle and Knight Frank at 31 March 2016.
Breakdown of NAV movement
Set out below is a breakdown of the change to the unaudited NAV per share calculated under IFRS over the period 31 December 2015 to 31 March 2016.
| Per Share (p) | Attributable Assets (£m) | Comment | |
| Net assets as at 1 January 2016 | 82.2 | 312.8 | |
| Unrealised increase in valuation of property portfolio | 0.1 | 0.3 | Like for like increase of 0.1% in property portfolio |
| Net income in the quarter after dividend | 0.4 | 1.6 | Strong net income in the quarter as full quarters rent from Dec 15 portfolio acquisition included but dividend paid in quarter related mainly to pre-acquisition shareholders |
| Interest rate swaps mark to market revaluation | -0.3 | -0.9 | Increase in swap liabilities as a result of a decrease in the expectation for future interest rates |
| Other movement in reserves | -0.1 | -0.5 | Movement in lease incentives and capital expenditure in the quarter |
| Net assets as at 31 March 2016 | 82.3 | 313.3 |
| European Public Real Estate Association (“EPRA”)* | 31 Mar 2016 | 31 Dec 2015 |
| EPRA Net Asset Value | £316.3m | £314.9m |
| EPRA Net Asset Value per share | 83.1p | 82.8p |
The Net Asset Value per share is calculated using 380,690,419 shares of 1p each being the number in issue on 31 March 2016.
* The EPRA net asset value measure is to highlight the fair value of net assets on an on-going, long-term basis. Assets and liabilities that are not expected to crystallise in normal circumstances, such as the fair value of financial derivatives, are therefore excluded.
Investment Manager Commentary
The first quarter of 2016 felt very different to the last half of 2015. The “Brexit” debate has come to centre stage, the low oil price has cut confidence and dividends and the combination of all these factors has resulted in stock market volatility. The Chancellor then added further pressure to the real estate market in the budget with a 1% increase in Stamp Duty Land Tax (“SDLT”) for larger commercial properties.
Despite this challenging environment tenant activity has remained robust. We have seen continued demand from occupiers on vacant space and have undertaken a number of successful asset management initiatives in the quarter as follows:
Letting of three vacant units at Budbrooke industrial estate, Warwick adding £92k in rent per annum after incentives; Successful lease regear at Broadoak, Manchester, one of the assets acquired in December as part of the portfolio acquisition, with solicitors instructed on two further regears at the same investment Rent review completed at Denby, above ERV and adding an additional £170k in rent.Overall voids have increased slightly to 3.7% due to an expiry at the end of the quarter on an industrial unit in Oldham with the other large void being an industrial unit in Bristol which is currently being refurbished.
Although uncertainty will remain elevated until the second half of the year we remain optimistic that tenant demand for smaller buildings outside Central London will remain robust and that income will continue to dominate total return.
Cash position
As at 31 March 2016 the Company had cash of £14.1 million.
Dividends
The Company paid total dividends in respect of the quarter ended 31 December 2015 of 1.161p per Ordinary Share, with a payment date of 31 March 2016. As previously announced the first interim dividend for 2016 will be 1.19p per Ordinary share, an increase of 2.5%.
Net Asset analysis as at 31 March 2016 (unaudited)
| £m | % of net assets | |
| Office | 163.7 | 52.3 |
| Retail | 100.8 | 32.2 |
| Industrial | 187.8 | 59.9 |
| Total Property Portfolio | 452.3 | 144.4 |
| Adjustment for lease incentives | (3.5) | (1.1) |
| Fair value of Property Portfolio | 448.8 | 143.3 |
| Cash | 14.1 | 4.5 |
| Other Assets | 6.0 | 1.9 |
| Total Assets | 468.9 | 149.7 |
| Non-current liabilities | (142.1) | (45.4) |
| Current liabilities | (13.5) | (4.3) |
| Total Net Assets | 313.3 | 100.0 |
Breakdown in valuation movements over the period 1 Jan 16 to 31 Mar 2016
| Portfolio Value as at 31 Mar 2016 (£m) | Exposure as at 31 Mar 2016 (%) | Like for Like Capital Value Shift | Capital Value Shift (£m) | |
| (%) | ||||
| Valuation as of 31 Dec 2015 | 452.0 | |||
| Retail | 100.8 | 22.3 | 0.0 | 0.0 |
| South East Retail | 6.8 | 1.9 | 0.6 | |
| Rest of UK Retail | 1.1 | -1.0 | -0.1 | |
| Retail Warehouses | 14.4 | -0.8 | -0.5 | |
| Offices | 163.7 | 36.2 | -0.2 | -0.4 |
| London City Offices | 4.7 | -0.7 | -0.2 | |
| London West End Offices | 2.4 | -0.9 | -0.1 | |
| South East Offices | 23.5 | -0.1 | -0.1 | |
| Rest of UK Offices | 5.6 | -0.1 | 0.0 | |
| Industrial | 187.8 | 41.5 | 0.4 | 0.7 |
| South East Industrial | 11.3 | -0.6 | -0.3 | |
| Rest of UK Industrial | 30.2 | 0.7 | 1.0 | |
| External valuation at 31 Mar 2016 | 452.3 | 100.0 | 0.1 | 452.3 |
Top 10 Properties
| 31 Mar 16 (£m) | |
| White Bear Yard, London | 20-25 |
| Elstree Tower, Borehamwood | 15-20 |
| Denby 242, Denby | 15-20 |
| DSG, Preston | 15-20 |
| Symphony, Rotherham | 15-20 |
| Chester House, Farnborough | 15-20 |
| Charter Court, Slough | 10-15 |
| 3B - C Michigan Drive, Milton Keynes | 10-15 |
| Ocean Trade Centre, Aberdeen | 10-15 |
| Bourne House, Staines | 10-15 |
The Board is not aware of any other significant events or transactions which have occurred between 31 March 2016 and the date of publication of this statement which would have a material impact on the financial position of the Company.Details of the Company may also be found on the Investment Manager’s website which can be found at: www.standardlifeinvestments.com/itsFor further information:-Jason Baggaley – Real Estate Fund Manager Standard Life InvestmentsTel +44 (0) 131 245 2833 or jason_baggaley@standardlife.comThe Company SecretaryNorthern Trust International Fund Administration Services (Guernsey) LtdTrafalgar CourtLes BanquesSt Peter PortGY1 3QLTel: 01481 745001Fax: 01481 745085