11 May
2016
STANDARD LIFE INVESTMENTS PROPERTY
INCOME TRUST LIMITED (LSE: SLI)
Unaudited Net Asset Value as at
31 March 2016
Key Highlights
- Net asset value per ordinary share was 82.3p as at 31 March 2016, an increase of 0.1% from
31 December 2015 resulting in a NAV
total return of 1.5% for Q1;
- The portfolio increased by 0.1% on a like for like basis which
compares favourably to the quarterly capital return on the monthly
IPD Monthly Index capital return over the quarter (fall of
0.2%);
- The increase in stamp duty land tax announced in the
March 2016 budget resulted in a £3.5
million reduction in valuations across the portfolio; excluding
this the portfolio showed a like for like increase of 0.8%;
- On 28 April 2016, the Company
announced a debt refinancing resulting in a new seven year term
loan facility of £110 million and a revolving credit facility of
£35 million at a current blended rate of interest of 2.5%, and a
LTV of 29.5%;
- Share price total return of 2.2% over the quarter as the
Company’s shares continue to trade at a premium to NAV. This return
compares favourably to the total return on both the FTSE All-Share
Index (-0.4%) and the FTSE REIT Index (-5.7%);
- Based on new dividend rate of 1.19p per quarter, dividend yield
of 5.5% based on share price of 86.25p (31
March 2016) comparing favourably to the yield on the FTSE
All-Share REIT Index (3.3%) and the FTSE All Share Index (3.8%) 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
31 March 2016 was 82.3p. 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 and
Knight Frank at 31 March 2016.
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 31 December 2015 to 31
March 2016.
|
Per Share (p) |
Attributable Assets (£m) |
Comment |
Net assets as at 1
January 2016 |
82.2 |
312.8 |
|
Unrealised increase in
valuation of property portfolio |
0.1 |
0.3 |
Like for like increase
of 0.1% in property portfolio |
Net income in the
quarter after dividend |
0.4 |
1.6 |
Strong net income in
the quarter as full quarters rent from Dec 15 portfolio
acquisition included but dividend paid in quarter related mainly to
pre-acquisition shareholders |
Interest rate swaps
mark to market revaluation |
-0.3 |
-0.9 |
Increase in swap
liabilities as a result of a decrease in the expectation for
future interest rates |
Other movement in
reserves |
-0.1 |
-0.5 |
Movement in lease
incentives and capital expenditure in the quarter |
Net assets as at 31
March 2016 |
82.3 |
313.3 |
|
European Public Real Estate Association (“EPRA”)* |
31 Mar 2016 |
31 Dec 2015 |
EPRA Net Asset Value |
£316.3m |
£314.9m |
EPRA Net Asset Value per share |
83.1p |
82.8p |
|
|
|
|
|
|
The Net Asset Value per share is calculated using 380,690,419
shares of 1p each being the number in issue on 31 March 2016.
* 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 first quarter of 2016 felt very different to the last half
of 2015. The “Brexit” debate has come to centre stage, the low oil
price has cut confidence and dividends and the combination of all
these factors has resulted in stock market volatility. The
Chancellor then added further pressure to the real estate market in
the budget with a 1% increase in Stamp Duty Land Tax (“SDLT”) for
larger commercial properties.
Despite this challenging environment tenant activity has
remained robust. We have seen continued demand from occupiers on
vacant space and have undertaken a number of successful asset
management initiatives in the quarter as follows:
- Letting of three vacant units at Budbrooke industrial estate,
Warwick adding £92k in rent per
annum after incentives;
- Successful lease regear at Broadoak, Manchester, one of the assets acquired in
December as part of the portfolio acquisition, with solicitors
instructed on two further regears at the same investment
- Rent review completed at Denby, above ERV and adding an
additional £170k in rent.
Overall voids have increased slightly to 3.7% due to an expiry
at the end of the quarter on an industrial unit in Oldham with the other large void being an
industrial unit in Bristol which
is currently being refurbished.
Although uncertainty will remain elevated until the second half
of the year we remain optimistic that tenant demand for smaller
buildings outside Central London
will remain robust and that income will continue to dominate total
return.
Cash position
As at 31 March 2016 the Company
had cash of £14.1 million.
Dividends
The Company paid total dividends in respect of the quarter ended
31 December 2015 of 1.161p per
Ordinary Share, with a payment date of 31
March 2016. As previously announced the first interim
dividend for 2016 will be 1.19p per Ordinary share, an increase of
2.5%.
Net Asset analysis as at 31 March 2016 (unaudited)
|
£m |
% of net assets |
Office |
163.7 |
52.3 |
Retail |
100.8 |
32.2 |
Industrial |
187.8 |
59.9 |
Total Property Portfolio |
452.3 |
144.4 |
Adjustment for lease incentives |
(3.5) |
(1.1) |
Fair value of Property
Portfolio |
448.8 |
143.3 |
Cash |
14.1 |
4.5 |
Other Assets |
6.0 |
1.9 |
Total Assets |
468.9 |
149.7 |
Non-current liabilities |
(142.1) |
(45.4) |
Current liabilities |
(13.5) |
(4.3) |
Total Net Assets |
313.3 |
100.0 |
Breakdown in valuation movements over the period 1 Jan 16 to 31 Mar
2016
|
Portfolio Value as at 31 Mar 2016 (£m) |
Exposure
as at 31 Mar 2016 (%) |
Like for
Like Capital Value Shift |
Capital Value Shift (£m) |
|
(%) |
Valuation as of 31 Dec
2015 |
|
|
|
452.0 |
|
|
|
|
|
Retail |
100.8 |
22.3 |
0.0 |
0.0 |
South East Retail |
|
6.8 |
1.9 |
0.6 |
Rest of UK Retail |
|
1.1 |
-1.0 |
-0.1 |
Retail Warehouses |
|
14.4 |
-0.8 |
-0.5 |
|
|
|
|
|
Offices |
163.7 |
36.2 |
-0.2 |
-0.4 |
London City
Offices |
|
4.7 |
-0.7 |
-0.2 |
London West End
Offices |
|
2.4 |
-0.9 |
-0.1 |
South East
Offices |
|
23.5 |
-0.1 |
-0.1 |
Rest of UK
Offices |
|
5.6 |
-0.1 |
0.0 |
|
|
|
|
|
Industrial |
187.8 |
41.5 |
0.4 |
0.7 |
South East
Industrial |
|
11.3 |
-0.6 |
-0.3 |
Rest of UK
Industrial |
|
30.2 |
0.7 |
1.0 |
|
|
|
|
|
|
|
|
|
|
External valuation at
31 Mar 2016 |
452.3 |
100.0 |
0.1 |
452.3 |
Top 10 Properties
|
31 Mar 16 (£m) |
|
|
White Bear Yard, London |
20-25 |
Elstree Tower, Borehamwood |
15-20 |
Denby 242, Denby |
15-20 |
DSG, Preston |
15-20 |
Symphony, Rotherham |
15-20 |
Chester House, Farnborough |
15-20 |
Charter Court, Slough |
10-15 |
3B - C Michigan Drive, Milton
Keynes |
10-15 |
Ocean Trade Centre, Aberdeen |
10-15 |
Bourne House, Staines |
10-15 |
The Board is not aware of any other significant events or
transactions which have occurred between 31
March 2016 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
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