Interim Management Statement

24 Jan 2008 07:01

Helical Bar PLC24 January 2008 24 January 2008 Helical Bar plc ("Helical" / "Company") Interim Management Statement for the third quarter to 31 December 2007 Helical to re-enter the investment market Commenting on the Company's activity in the third quarter, Mike Slade, ChiefExecutive, said: "We have had an active third quarter. Notwithstanding the challenging currentmarket conditions, we are well placed to generate value for our shareholdersthrough the application of our skills and active and entrepreneurial approach tothe management of our assets. "Whilst remaining cautious, we see an opportunity opening up to buy investmentstock at appropriate yields for the first time since 2005. It has beenfrustrating to see prices rise to ever more unsustainable levels and we aredelighted at the prospect of finally being able to find value again in thisimportant area of our business." Market update The commercial property market has undergone an extremely sharp correction witha rapid rise in yields leading to values falling faster during November andDecember than at any time measured by the IPD benchmark since inception in 1986.Nonetheless, whilst economic clouds on the horizon require us to take acautious view of occupational markets, we see an opportunity opening up to buyinvestment stock at appropriate yields for the first time since 2005. The opportunity will, however, be balanced by the inevitable impact on ourexisting investment portfolio of the well-publicised rising yields in themarket. Whilst not immune from these general trends, we have positioned ourbusiness to mitigate the impact of this: . Our gearing is approximately half our historic average, giving us plenty of firepower for new acquisitions. . Our investment portfolio is currently a much smaller proportion of our overall business than usual as we have switched into a variety of activities where profits are less likely to be undermined by rising yields in the UK. . In addition, the considerable effort we have made over the last two years to identify and focus our portfolio on change of use deals, retirement village developments, student accommodation, industrial developments for owner occupation, retail warehouse development in Poland and property outsourcing all create latent potential within our portfolio. This latent potential is likely to be released over the next three years,whereas we anticipate that the industry-wide valuation falls will mostly happenthis year. Key activities over the last three months Planning pipeline • High Wycombe - We have signed a Joint Venture agreement with National Grid for a three acre town centre site in High Wycombe. The proposal is to develop a mixed use scheme comprising 100,000sqft retail and leisure space and 125 residential units. • Milton Keynes - We have been granted planning consent for 28,000sqft of trade counter space at Winterhill. • Vauxhall, London, SW6 - In partnership with National Grid (UK) Pension Fund, we are making progress in gaining an allocation of space for a large residential-led mixed-use development on a Thameside industrial estate. • Fieldgate Street, London - Our planning application for 12,000sqft of retail and 340 student residential units will be submitted before the end of February. • Culwell Street, Wolverhampton - A planning application has been submitted for 200,000sqft of student accommodation. • Great Alne - Our planning appeal for 175 retirement units at Great Alne has been refused. The detail of the Inspector's decision leaves several options open to us and we are examining the various alternatives. • Cambridge, Horsham, Exeter - We will be submitting planning applications on these three sites by the end of March for a total of almost 500 retirement village units. • White City - Discussions continue with the planning authority and adjoining owners for a major mixed use regeneration scheme. Developments • Southall - Construction of phase I (165,000sqft) of our 250,000sqft scheme for industrial units for freehold sale has started. 54,000sqft is in solicitors' hands to be sold. • Bramshott Place, Liphook - Construction has commenced for the first phase of 45 retirement village units. • Clareville House, London, W1 - Strong interest has been expressed in this 23,000sqft restaurant/night-club and 35,000sqft office scheme in partnership with National Grid (UK) Pension Fund. • Poland - Negotiations are under way to pre-fund all of our 115,000sqm out of town retail portfolio at Opole, Gliwice and Wroclaw with construction to commence in the summer. • Milton Keynes - In joint venture with Abbeygate Limited, we are in negotiations to construct up to 100,000sqft of offices to be mainly pre-let to the lawyers Shoosmiths. • Helical Governetz - We have added a joint venture with UK Coal at Waverley, Sheffield to our proposed schemes at Keele and Newport, for dedicated Government campuses. Other investments • Our 50% held company the Asset Factor continues to expand. Its joint venture with Nelson Bakewell NB Entrust is trading profitably and continues to increase the size of its facilities management portfolio. It has also opened a new joint venture, Asset Space Ltd, to exploit the opportunities for advertising and alternative revenue generation from commercial property. For further information, please contact: Helical Bar plc 020 7629 0113Michael Slade (Chief Executive)Mike Brown (Deputy Chief Executive)Nigel McNair Scott (Finance Director) Address: 11-15 Farm Street, London W1J 5RSFax: 020 7408 1666Website: www.helical.co.uk Financial Dynamics 020 7831 3113Stephanie Highett/Dido Laurimore/Laurence Jones This information is provided by RNS The company news service from the London Stock Exchange