27 Jan 2014 07:30
27 January 2014
STANDARD LIFE INVESTMENTS PROPERTY INCOME TRUST LIMITED (LSE: SLI)
Unaudited Net Asset Value as at 31 December 2013
Key Highlights
· Net asset value per ordinary share was 65.5p as at 31 December 2013, an increase of 9.7% from 30 September 2013. The NAV total return to investors over the quarter was 12.0%.
· Dividend yield of 6.1% based on share price of 74.0p (23 January 2014).
· Cash held by the Company was £12.3m at 31 December 2013.
· Portfolio of 3 well let retail warehouses purchased during the quarter for £12.7m excluding costs.
Net Asset Value ("NAV")
The unaudited net asset value per ordinary share of Standard Life Investments Property Income Trust Limited ("SLIPIT") at 31 December 2013 was 65.5 pence. This is an increase of 9.7% over the net asset value of 59.7 pence per share at 30 September 2013. 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 at 31 December 2013. The property portfolio will next be valued by the external valuer during March 2014 and the next quarterly net asset value will be published thereafter.
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 30 September 2013 to 31 December 2013.
£m | Pence per share | % of opening NAV | |
Unaudited Net Asset Value at 30 September 2013 | 91.0 | 59.7 | - |
Gain - realised and unrealised following revaluation of property portfolio (including the effect of gearing) | 6.6 |
4.3 |
7.2% |
Decrease in unrealised interest rate swap valuations Other movement in reserves | 2.0 0.3 | 1.3 0.2 | 2.2% 0.3% |
New shares issued | 1.7 | - | - |
Unaudited Net Asset Value at 31 December 2013 | 101.6 | 65.5 | 9.7% |
European Public Real Estate Association ("EPRA")* | 31 Dec 2013 | 30 Sept 2013 |
EPRA Net Asset Value | £101.6m | £93.1m |
EPRA Net Asset Value per share | 65.5p | 61.0p |
The Net Asset Value per share is calculated using 154,994,237 shares of 1p each being the number in issue on 31 December 2013.
* 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 Company had a strong final quarter in 2013 as evidence of the stronger demand for good secondary properties came through, and a number of asset management initiatives completed. The Company's portfolio delivered capital growth of 4.1% and a total return of 6.1% over the quarter, against an IPD Monthly Index return of 3.0% and 4.7% respectively.
The Company's occupancy rate remains at 93% although the letting of the largest void, Bourne House Staines, remains in solicitors' hands. If this completes then the occupancy rate would be circa 97%. The average unexpired lease term is 5.2 years following the recent purchases.
During Q4 the Company completed the purchase of three retail warehouse investments, and so at the quarter end had a total cash position of £12.3m. We are in solicitors hands on the purchase of an industrial investment of £3.9m, 10.5% initial yield.
At the year end an interest rate swap matured, which means the Company's cost of debt has reduced to 3.8%, giving it an annual cost saving of circa £2.0m.
Cash position
As at 31 December 2013 the Company had borrowings of £84.4m and a cash position of £12.3m (excluding rent deposits) therefore cash as a percentage of debt was 14.6%.
Dividend
The Company paid an interim dividend, in respect of the quarter ended 30 September 2013, of 1.133p per Ordinary Share, with ex-dividend and payment dates of 13 November and 29 November 2013 respectively.
Loan to value and interest rate
As at 31 December 2013 the loan to value ratio (assuming all cash is placed with RBS as an offset to the loan balance) was 40.9% (30 September 2013: 39.1%). The covenant level is 65%. The Company has a current weighted average interest rate of 3.8% to December 2018, of which 100% is fixed with a maturity to December 2018.
The interest rate swaps had a positive impact on the NAV of 1.3p per share or 2.2% over the quarter, and the fair value liability was £0.1m as at 31 December 2013. The Company has two interest rate hedges which mature in December 2018, and have a current liability of £0.1m (30 September: £1.2m).
Net Asset analysis as at 31 December 2013 (unaudited)
£m | % | |
Office | 79.9 | 78.6 |
Retail | 48.3 | 47.5 |
Industrial | 48.2 | 47.5 |
Total Property Portfolio | 176.4 | 173.6 |
Adjustment for lease incentives | (3.5) | (3.4) |
Fair value of Property Portfolio | 172.9 | 170.2 |
Cash | 12.3 | 12.1 |
Other Assets | 5.2 | 5.1 |
Non-current liabilities | (83.9) | (82.6) |
Current liabilities | (4.9) | (4.8) |
Total Net Assets | 101.6 | 100.0 |
Breakdown in valuation movements over the period 1 Oct 2013 to 31 Dec 2013
Exposure as at 31 Dec 2013 (%) | Capital Value Movement on Standing Portfolio (%) | Capital Value Movement on Portfolio (£m) | |
External Valuation at 30 Sept 2013 | 156.3 | ||
Sub Sector Analysis: | |||
RETAIL | |||
South East Retail | 6.0 | 0.5 | 0.1 |
Retail Warehouses | 21.4 | 0.0 | 12.8* |
OFFICES | |||
Central London Offices | 12.2 | 12.9 | 2.5 |
South East Offices | 19.0 | 4.5 | 1.5 |
Rest of UK Offices | 14.1 | 2.5 | 0.6 |
INDUSTRIAL | |||
South East Industrial | 4.6 | 7.3 | 0.5 |
Rest of UK Industrial | 22.7 | 5.6 | 2.1 |
External Valuation at 31 Dec 2013 | 100.0 | 4.1 | 176.4 |
*Due to purchase of Retail Warehouses in Q4
Top 10 Properties
Weighting 31 Dec 2013 | |
Tesco Distribution Unit, Bolton | 8.2% |
White Bear Yard, London | 7.2% |
Hertford Place, Rickmansworth | 6.2% |
Hollywood Green, London | 6.0% |
St James's House, Cheltenham | 5.3% |
Ocean Trade Centre, Aberdeen | 5.1% |
New Palace Place, London | 5.0% |
Clough Road Retail Park, Hull | 4.5% |
Explorer 1 & 2 & Mitre Court, Crawley | 3.5% |
Bathgate Retail Park, Bathgate | 3.4% |
Total | 54.4% |
The Board is not aware of any further significant events or transactions which have occurred between 31 December 2013 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/its
For further information:-
Jason Baggaley - Real Estate Fund Manager Standard Life Investments
Tel +44 (0) 131 245 2833 or jason_baggaley@standardlife.com
Gordon Humphries - Head of Investment Companies Standard Life Investments
Tel +44 (0) 131 245 2735 or gordon_humphries@standardlife.com
The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Ltd
Trafalgar Court
Les Banques
St Peter Port
GY1 3QL
Tel: 01481 745001
Fax: 01481 745085