20 October
2015
STANDARD LIFE INVESTMENTS PROPERTY
INCOME TRUST LIMITED (LSE: SLI)
Unaudited Net Asset Value as at
30 September 2015
Key Highlights
- Net asset value per ordinary share was 80.9p as at 30 September 2015, an increase of 3.1% from
30 June 2015 resulting in a NAV total
return of 4.5% for Q3;
- The property portfolio produced a total return of 4.3%,
significantly outperforming the 3.4% total return on the MSCI
(formerly IPD) Monthly Index over the same period;
- In Q3, four office properties purchased for £18.0m excluding
costs, two industrial properties purchased for £6.0m excluding
costs and one retail property purchased for £5.1m excluding
costs;
- Three industrial properties sold during Q3 for £7.7m excluding
costs, as well as one retail property sold for £5.3m excluding
costs and one office property sold for £5.5m excluding costs;
- Dividend yield of 5.4% based on share price of 86.5p
(15 October 2015) comparing
favourably to the yield on the FTSE All-Share REIT Index (2.7%) and
the FTSE All Share Index (3.6%) as at the same date.
Net Asset Value (“NAV”)
The unaudited net asset value per ordinary share of Standard
Life Investments Property Income Trust Limited (“SLIPIT”) at
30 September 2015 was 80.9p. This is
an increase of 3.1% over the net asset value of 78.5p per share at
30 June 2015. 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
30 September 2015. The property
portfolio will next be valued by the external valuer during
December 2015 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 June 2015 to 30
September 2015.
|
£m |
Pence per
share |
% of opening
NAV |
Unaudited Net Asset Value at 30 June
2015 |
226.4 |
78.5 |
- |
Gain - unrealised on the standing
portfolio following revaluation of property portfolio |
7.8 |
2.7 |
3.5% |
Gain - on sale of properties |
0.8 |
0.3 |
0.4% |
Costs on the purchase of investment
property |
(0.8) |
(0.3) |
(0.4%) |
Increase in unrealised interest rate
swap liability |
(0.7) |
(0.2) |
(0.3%) |
Other movement in reserves |
(0.3) |
(0.1) |
(0.1%) |
Unaudited Net Asset Value at 30
September 2015 |
233.2 |
80.9 |
3.1% |
|
|
|
|
European Public Real Estate
Association (“EPRA”)* |
30 Sep 2015 |
30 Jun 2015 |
|
EPRA Net Asset Value |
£235.8m |
£228.3m |
|
EPRA Net Asset Value per share |
81.8p |
79.2p |
|
|
|
|
|
|
|
|
|
The Net Asset Value per share is calculated using 288,387,160
shares of 1p each being the number in issue on 30 September 2015.
* 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 UK commercial real estate market continues to benefit from
strong investment and improving tenant demand. Given the lack of
new construction over the last 8 years, the supply of good quality
accommodation is low in most markets and this is leading to rental
growth momentum starting to build. The relatively high margin of
real estate yields over UK Gilts means the sector remains popular
with investors, both overseas and domestic.
During the third quarter we were able to complete a number of
asset management initiatives, the main one being two lease regears
and a new lease at White Bear Yard London – the new leases have
moved the rents up in the building and provide a greater ability
for us to extend the building in the future by having all lease
expiries at the same time. We also completed the lease at Ocean
Trade Centre to CCF (part of Travis
Perkins) and, after the quarter end, signed the Scottish
Ministers on the remaining vacant units – all on 10 year leases. In
order to maximise income we granted a short term lease expiry on an
industrial unit in Oldham taking
the rent from £4.50psf to £8.50psf for a 12 month extension.
Following the completion of the purchase of three offices and a
retail warehouse at the beginning of the quarter (reported with the
Q2 NAV), we also completed the purchase of two single let logistics
units and an office for a total of £10.7m, the sale of an office in
Glasgow for £5.7m and of a
standalone retail warehouse for £5.3m.
As already notified to the market, the Company has signed heads
of terms to acquire a portfolio of 22 UK commercial properties for
a cash consideration of approximately £165m. We are making good
progress on our due diligence and hope to update further through
the publication of a prospectus in early November.
Cash position
As at 30 September 2015 the
Company had borrowings of £84.4m and a cash position of £16.3m
(excluding rent deposits) therefore cash as a percentage of debt
was 19.3%.
Dividends
The Company paid an interim property income dividend in respect
of the quarter ended 30 June 2015 of
1.161p per Ordinary Share, with ex-dividend and payment dates of
6 August 2015 and 21 August 2015 respectively.
Loan to value and interest rate
As at 30 September 2015 the loan
to value ratio (assuming all cash is placed with RBS as an offset
to the loan balance) was 22.1% (30 June
2015: 19.8%). The bank covenant level is 65%. As a result of
interest rate swaps the weighted average interest rate on the loan
is fixed at 3.7% until the loan matures in December 2018.
Net Asset analysis as at 30 September 2015 (unaudited)
|
£m |
% of net assets |
Office |
129.5 |
55.5 |
Retail |
64.0 |
27.4 |
Industrial |
115.3 |
49.4 |
Total Property Portfolio |
308.8 |
132.3 |
Adjustment for lease incentives
& sales costs on assets held for sale |
(2.3) |
(0.9) |
Fair value of Property
Portfolio |
306.5 |
131.4 |
Cash |
16.3 |
7.0 |
Other Assets |
4.6 |
2.0 |
Total Assets |
327.4 |
140.4 |
Non-current liabilities |
(86.7) |
(37.2) |
Current liabilities |
(7.5) |
(3.2) |
Total Net Assets |
233.2 |
100.0 |
Breakdown in valuation movements over
the period 1 Jul 2015 to 30 Sep 2015
|
Exposure as at 30
Sept 2015 (%) |
Capital Value
Movement on Standing Portfolio (%) |
Capital Value Movement
on Portfolio (£m) |
External Property Valuation at 30
Jun 2015 |
|
|
288.4 |
IPD Sub Sector Analysis: |
|
|
|
RETAIL |
|
|
|
South East Retail |
5.4 |
0.8 |
0.1 |
Retail Warehouses |
15.3 |
1.2 |
0.3* |
|
|
|
|
OFFICES |
|
|
|
London City Offices |
6.6 |
13.6 |
2.4 |
London West End Offices |
3.4 |
1.8 |
0.2 |
South East Offices |
22.6 |
2.6 |
15.7* |
Rest of UK Offices |
9.3 |
2.7 |
0.1* |
|
|
|
|
INDUSTRIAL |
|
|
|
South East Industrial |
9.8 |
4.2 |
4.5* |
Rest of UK Industrial |
27.6 |
2.3 |
(2.9)* |
|
|
|
|
External Property Valuation at 30
Sep 2015 |
100.0 |
3.0 |
308.8 |
*Inclusive of Q3 purchases and sales
Top 10 Properties
|
30 Sep 15 (£m) |
|
|
White Bear Yard, London |
20-25 |
DSG, Preston |
15-20 |
Chester House, Farnborough |
15-20 |
Symphony, Rotherham |
15-20 |
Denby 242, Denby |
10-15 |
Hertford Place, Rickmansworth |
10-15 |
St James's House, Cheltenham |
10-15 |
3B - C Michigan Drive, Milton
Keynes |
10-15 |
Hollywood Green, London |
10-15 |
Bourne House, Staines Upon
Thames |
10-15 |
The Board is not aware of any other significant events or
transactions which have occurred between 30
September 2015 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