TAP.L Regulatory News (TAP)

19 May 2009 15:16



FOR IMMEDIATE RELEASE

19 May 2009

THE ADVANTAGE PROPERTY INCOME TRUST LIMITED

("TAP" or "The Company")

COVENANT COMPLIANCE

TEMPORARY SUSPENSION OF DIVIDEND

The Board of TAP has met to consider the quarter 1 2009 dividend distribution. It has concluded that in the prevailing economic and commercial environment, certainty of compliance with debt covenants has a more beneficial effect on investor sentiment, than the absolute level of dividends paid in a single financial period. In the light of continuing uncertainty over capital values brought about by current market conditions, the Board has decided to temporarily suspend the Company's quarterly dividend payment with effect from the first quarter of the current financial year. This reflects the Board's view that maintaining a robust balance sheet, with certainty of compliance with debt covenants is paramount.

The temporary suspension of the dividend, on the basis of the 0.8125p per share paid for the fourth quarter of 2008, will save the Company approximately £1.1 million per quarter, which will be used to pay down debt.  This exceptional step, together with the proceeds of sales referred to below, will ensure that the Company continues to operate within its covenants and remain within the lower band of its tiered margin (thereby retaining its very competitive overall cost of debt at below 6%) even in the face of further falls in capital value in 2009.

The planned asset sales, which are progressing well (TAP has exchanged on a sale for £1.7m, it has five assets in solicitors hands which amount to over £8 million), will provide further flexibility to the Board going forward. The monies achieved will be used to further pay down debt and current forecasts show our blended LTV will fall below 52% based on current GAV.

The Board is very aware that a number of TAP shareholders hold the stock for income and the Board fully intends to reinstate the dividend as soon as possible. It is the Company's hope that the reduction of debt levels from the actions described above and the stabilisation of asset values will enable the resumption of dividend payments during the second half of 2009.

The Company remains convinced that its long term strategy and philosophy of investing in income producing assets providing income growth remains attractive and that the high yielding assets and added value present in TAP will provide long term performance for its investors. The Board thanks shareholders for their continuing support and understanding in these difficult times.

For further information, please visit www.tapincome.com or contact: