3 Feb 2023 07:00
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Value and Indexed Property Income Trust PLC - VIP
Third Quarter Update - Raising Income and Tenant Quality
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Value and Indexed Property Income Trust PLC ("VIP") invests directly in UK commercial property to deliver long, strong, indexed income. Since 30 September 2022, it has added £0.4 million of annualised rent, raising the total contracted rent roll to £8.8 million, by:
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1. Completing the lease of a new 80 bedroom Premier Inn hotel and in-house Brewers Fayre pub/restaurant at Alnwick, Northumberland, on practical completion of development works in October 2022. The hotel and pub/restaurant are open and trading. The property is let to Premier Inn for twenty five years with a tenant's option to break in 2042, and five yearly CPI-linked rent reviews to a maximum of 4% per annum; and
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2. Agreeing rent reviews at Dundee and Thetford (industrials) and Doncaster (leisure), delivering an average uplift of 10.6% against their previous passing rents.
There are no voids in the portfolio and 100% of rent has been collected.
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The completion of the Alnwick development follows the purchase earlier in VIP's year of an index-linked Marks & Spencer supermarket at Rayleigh, Essex and the sale of five over-rented or short let properties. This activity has further improved tenant quality with 54% of total rents payable by the top five tenants - M&S, HM Government/Councils, Premier Inn, Co-op and Sainsburys - up from 44% in March 2022.Â
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VIP has a resilient, diversified portfolio with long leases (WAULT 12.1 years to break) and indexed (80%) and fixed (16%) rent increases. 11 indexed rent reviews have completed in VIP's financial year so far: 7 x annual rent increases (5 @ 4%, 1 @ 7% and 1 @ 1.95%) and 4 x five yearly rent increases (averaging a total uplift of 16.2%). There are 13 rent reviews falling due over the next 12 months.
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92% of VIP's properties have an EPC (Energy Performance Certificate) rating A-C (up from 64% since March 2022) and we continue to work with our tenants to improve energy efficiency.
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VIP has a 36 year dividend growth record. The targeted total dividend for the full year 2022/2023 is 12.9p, representing a yield of 5.8% at the closing price of 222p on 1 February 2023. The Company is expected to fully cover the dividend in 2023/2024 following reinvestment of the £5 million proceeds from sales completed in September 2022. The interest rate payable on VIP's debt is 3.8%, of which 97% is fixed, with an average maturity of 8.1 years.
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Savills independently revalue the property portfolio half-yearly at 31 March and 30 September.
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Enquiries:
OLIM Property Limited, Investment Manager
Tel: 020 7846 3252
Louise.cleary@olimproperty.co.uk
matthew.oakeshott@olimproperty.co.uk
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