Trading Update

1 March 2016

Helical Bar plc ("Helical" or the "Company")

Trading Update for the period since 1 October 2015

HELICAL COMPLETES THE BOWER ACQUISITION, ROTATES ITS PORTFOLIO IN LONDON AND THE REGIONS AND COMPLETES ITS RESTRUCTURING OF THE BOARD THROUGH THE APPOINTMENT OF TWO INDEPENDENT NON-EXECUTIVE DIRECTORS

Helical Bar plc today announces its Interim Management Statement covering its activities for the period

1 October 2015 to 29 February 2016 ("the Period").

Commenting on the Company's activities, Michael Slade, Chief Executive, said:

"I am pleased to report another period of strong progress in our development programme with lettings achieved above anticipated ERV levels on new and refurbished space. The purchase of The Bower from the joint venture with our partner Crosstree Real Estate Partners LLP, represents a notable step-change in the growth of the business. This asset is located by the vibrant and rapidly changing Old Street roundabout, which is becoming firmly established as a new core location for London office tenants.

"Last week we announced the appointment of Richard Cotton to the Board as a Non Executive Director. Together with Susan Clayton, who joined in February, they will add strong real estate and business expertise to the Board whilst adding further independence and balance. We very much look forward to their contribution to the Company."

Highlights

· Acquisition of The Bower, London EC1 for £248m, the largest transaction in the Company's history;

· Completion of the letting of the first phase of the Bower comprising c. 150,000 sq ft;

· Sales of an additional seven units have exchanged at Barts Square, London EC1 taking sales to 99 residential units totalling c. £127m at an average of £1,578 psf;

· Planning permission obtained for a complete refurbishment of 23-28 Charterhouse Square, London EC1 to provide 38,500 sq ft of offices and 5,100 sq ft of restaurant use;

· Acquisition of Power Road Studios, London W6 for c. £34.2m and three regional assets for a total of c. £13m including two industrial units at an average yield of 7.6%;

· Completion of the sales of Enterprise House, London W2 for £43m and Artillery Lane, London EC1 for £15.1m;

· Sale of a six asset portfolio for £29m comprising five retail assets and one small regional office, at a yield of 7.25%;

· Lease renewal and re-gear at Shepherds Building, London W14 to Endemol across 80,000 sq ft of space at an average rent of £48.50 psf capturing significant rental reversion at the building;

· Record rent in Hammersmith achieved of £55 psf with completion of pre-let at One King Street, London W6;

· Contracted rents on the investment portfolio increased from £42.4m at 30 September 2015 to c. £57.0m;

· Sale of land in Cawston, Rugby at a net receipt to Helical of c. £8m, a £4.75m premium to book value (144% premium) and a £1.5m premium to fair value;

· Since 1 October 2015, we have completed on the sales of 13 retirement village units generating gross proceeds of £5.8m, and currently have nine sales exchanged and 36 units reserved with a total sales value of £19.2m;

· Payment of a second interim dividend of 5.15 pence per share planned for April 2016, taking the total dividends for the year to date to 7.45 pence.

LONDON PORTFOLIO

Our London portfolio provides opportunities for capital growth and development profits.

The Bower

At The Bower, Old Street, London EC1 we have: -

· Completed the purchase of The Warehouse, The Studio and The Tower for £248m from our joint venture with Crosstree Real Estate Partners;

· Completed the sale from the joint venture to Crosstree of the retail parade at The Bower for £23m;

· Sold Empire House to Standard Life for £20.65m;

· Completed the last remaining lettings in The Warehouse.

The current letting position is as follows:-

· Phase 2 of the development, the refurbishment of The Tower, has commenced and will deliver a further c. 170,000 sq ft of offices and c. 7,600 sq ft of restaurant use. It is due for completion in Q4 2017.

Barts Square

At Barts Square, London EC1 we have: -

· Exchanged contracts on 99 residential units in the first phase of the development, comprising 144 units, for total sale proceeds of £127.3m at an average of £1,578 psf with delivery expected in Q3 2017;

· Commenced demolition works on the existing buildings in advance of constructing One Bartholomew Close, a new 12 storey office building of c. 212,858 sq ft, pre-sold to clients of Ashby Capital LLP;

· The remaining phase of residential, comprising an additional 92 units, is due to commence in November 2016 for delivery in Q1 2019.

One Creechurch Place

At One Creechurch Place, London EC3 we are:-

· Continuing to make good progress in constructing a c. 273,000 sq ft new office building, being built in joint venture with HOOPP (Healthcare of Ontario Pension Plan) and due for completion in September 2016.

Charterhouse Square

At 23-28 Charterhouse Square, London EC1 we have:-

· Completed the acquisition of the building and been granted a new 155 year lease by the freeholders, Charterhouse;

· Received planning approval for a comprehensive refurbishment of the current building which will create c. 38,500 of office space and 5,100 sq ft of restaurant use;

· Commenced works which are expected to complete in Q1 2017.

Transactions in the Period

Since 1 October 2015 we have:-

· Completed the purchase of Power Road Studios, Chiswick, West London, for £34.2m reflecting a net yield of 4.4%. The office complex offers immediate income as well as the scope for extension and development. The two-acre site houses five standalone buildings, totalling 62,000 sq ft which are 100% occupied by a range of tenants, from small entrepreneurial businesses and retail companies to larger media firms. Average rents are £25.00 psf but since acquisition we have completed two new lettings and two renewals at £38 psf;

· Completed the sale of Enterprise House, London W2 for £43m, a 10% premium to the 30 September 2015 book value, and Artillery Lane, London E1 for £15.1m, its book value at 30 September 2015.

Asset Management

Since 1 October 2015 we have:-

· Completed the works at One King Street, Hammersmith, London W6, refurbishing the 4th floor and constructing a new lightweight 5th floor. These floors were pre-let to Orion Health on a ten year lease at rents of £52.50 and £55.00 psf. We have also let retail space to Ladbrokes and Snappy Snaps on 10 year leases and the building is now fully let;

· At Shepherd's Building, London W14 we have completed new leases to Endemol, increasing the total contracted rent roll by £1.27m and securing their occupation of the building until December 2026, with a five year break. The average contracted rent for the building is now c. £45.75psf with total contracted net rent of £6.68m compared to a passing net rent of c. £4.38m;

· At The Loom, Whitechapel, London E1, we are making good progress on the refurbishment works, incorporating a new entrance and café, and expect to have c. 25,000 sq ft available in nine different sized units, in May 2016.

REGIONAL PORTFOLIO

Our regional portfolio provides significant cash flow for the Group. We have a broad spread of income providing diversity between tenants and sectors of the market.

Since 1 October 2015 we have acquired:-

· A vacant 25,300 sq ft office in Manchester for £4.65m, to be refurbished and let;

· A 53,000 sq ft industrial warehouse in Salford, Manchester for £4m, fully let until 2029;

· A 63,000 sq ft industrial unit in Wellingborough for £4.4m, fully let until 2020.

We have sold:-

· A portfolio of four retail warehouses, one in-town retail unit and one regional office for c.£29m reflecting a yield of 7.25%;

· Land at Cawston, Rugby to Bellway Homes for £14.3m. After the payment of overage, this will result in a net receipt to Helical of c. £8m, a £4.75m premium to book value (144% premium) and a £1.5m premium to fair value.

Asset Management

Since 1 October 2015 we have:-

· Completed our current refurbishment programme at Churchgate and Lee House, Manchester where the buildings are 85% let with strong interest in the refurbished units. Contracted rents are c. £3.2m compared to current net operating income of c. £2.6m;

· Completed a number of lettings at the Morgan Quarter, Cardiff in both our retail units and the Creative Quarter's new offices. The second phase of the Creative Quarter is due to complete shortly with six new suites available, of which three are under offer;

· Taken back two distribution warehouses in Doncaster and Burton-upon-Trent, where tenants have vacated and we are confident we can re-let the space at rents above previous levels. The remainder of the industrial portfolio of c. 35 units is fully let.

Retirement Villages

Since 1 October 2015 we have:-

· Taken the management of the retirement village development programme in-house and terminated the joint venture agreement. We have implemented wide ranging changes including a new marketing, sales and management approach and we have seen an improvement in unit sales since these changes were made;

· Completed the sale of the last two remaining units at Bramshott Place, Liphook and sold 11 units at Durrants Village, Faygate and Millbrook Village, Exeter for a total of £5.8m. We currently have nine sales exchanged and 36 reserved with a total sales revenue of £19.2m.

FINANCING

Since 30 September 2015, we have:-

· Agreed a £200m club facility with The Royal Bank of Scotland, Lloyds and Santander with £149.5m drawn down in January 2016 to finance the acquisition of The Bower and £50.5m available to finance the refurbishment of The Tower. The facility has a term of four years to November 2019;

· Repaid and cancelled the £88m facility with Deutsche Bank on The Bower, originally due for repayment in January 2017, of which Helical's share was one third;

· Facilitated the introduction of HSBC to the £100m revolving credit facility with RBS (now shared equally between the two banks) and exercised an option to extend the facility by one year with an amended repayment date of April 2021;

· Repaid and cancelled £40m of facilities due for repayment in October 2015/January 2016.

As a consequence of these changes, no secured facilities are due for repayment or refinancing before November 2019.

At 31 January 2016, the Company's bank facilities comprised:-

· £474m of investment facilities of which £470m was drawn down. These borrowings have an average maturity date of five years and one month and a weighted average cost of debt of 3.6%;

· £160m of site acquisition and development facilities of which £99m was drawn down, leaving £61m to fund Phase 2 of the development of The Bower and the retirement village development programme. These borrowings have an average debt maturity date of four years and two months and a weighted average cost of debt of 5.5%;

· A share of bank facilities in joint ventures of £53m of which £30m was drawn down. These facilities have an average maturity date of three years and eleven months and a weighted average cost of debt of 3.4%.

Including the £80m retail bond and the £100m convertible bond, Helical's share of net debt as at 31 January 2016, including debt and cash held in joint ventures, was £701m (30 September 2015: £518m), with an average maturity date of four years and eight months (30 September 2015: four years and three months) and a weighted average cost of debt of 4.1% (30 September 2015: 3.8%). Of the borrowings, £634m (81%) is fixed at an average rate of 4.2% with the remaining £145m (19%) floating at an average rate of 3.7%. The Company has £118m of interest rate caps protecting it against base rate rises up to a weighted average of 4%.

DIVIDEND

In advance of the changes to the taxation of dividends, effective from 6 April 2016, the Company intends paying a second interim dividend of 5.15 pence per share on 4 April 2016. This dividend payment, the same as last year's final dividend paid in July 2015, takes the total dividend for the year to 7.45p, an increase of 2.8% on last year's total dividend (interim and final) of 7.25p. The Company will confirm whether a final dividend is to be recommended to shareholders at the 2016 AGM when the results for the year to 31 March 2016 are announced in May 2016.

BOARD CHANGES

As announced on 28 November 2015 with the half year results, Michael Slade is to take over as Chairman of the Company at the 2016 AGM and is to be replaced as Chief Executive by Gerald Kaye. Our current Chairman, Nigel McNair Scott and Non-Executive Director Andrew Gulliford, are to retire from the Board at the same time. In line with indications made in November, to provide further independence and balance to the Board, Susan Clayton and Richard Cotton have been appointed as new independent Non-Executive Directors. Following these changes the Board will be comprised of a Chairman, Four Executive Directors and five independent Non-Executive Directors.

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