TIDMBREI 
 
To:                   Company Announcements 
 
Date:                27 January 2021 
 
Company:        BMO Real Estate Investments Limited 
 
LEI:                  231801XRCB89W6XTR23 
 
Subject:           Trading Update and Net Asset Value 
 
Background 
 
BMO Real Estate Investments Limited ("BREI" or the "Company") provides an 
update on trading and the net asset value as at 31 December 2020. 
 
Net Asset Value ('NAV') 
 
The unaudited NAV per share of BREI as at 31 December 2020 was 98.1 pence. This 
represents an increase of 3.5 per cent from the NAV per share as at 30 
September 2020 of 94.8 pence and a NAV total return for the quarter of 4.4 per 
cent. 
 
The NAV is based on the external valuation of the Company's property portfolio 
prepared by Cushman & Wakefield. 
 
The NAV is calculated under International Financial Reporting Standards 
("IFRS"). 
 
The NAV includes all income to 31 December 2020 and is calculated after the 
deduction of all dividends paid prior to that date. 
 
Breakdown of NAV movement 
 
Set out below is a breakdown of the change to the unaudited net asset value per 
share calculated under IFRS over the period from 30 September 2020 to 31 
December 2020. 
 
                                                      Pence    % of 
                                                        per opening 
                                                      share     NAV 
 
Net asset value per share as at 30 September 2020      94.8 
 
Unrealised movement in valuation of property            3.1    3.3* 
portfolio (including the effect of gearing) 
 
Movement in revenue reserves                            0.2     0.2 
 
Net asset value per share as at 31 December 2020       98.1     3.5 
 
* The un-geared increase in the valuation of the property portfolio over the 
quarter to 31 December 2020 was 2.4%. 
 
Share Price 
 
The share price was 61.0 pence per share as at 31 December 2020, which 
represented a discount of 37.8 per cent to the NAV per share announced above. 
The share price total return for the quarter was 19.8 per cent. 
 
Performance 
 
Overall, the property market delivered positive total returns over the quarter, 
largely driven by a strong performance from industrials and distribution. 
Performance was polarised, with town centre retail and leisure remaining under 
considerable pressure and offices faltering. Total return performance turned 
positive for retail warehousing. Despite a strong end to the year for parts of 
the market, buoyed by positive developments on vaccines and the resolution of 
Brexit, overall sentiment is cautious, with the re-imposition of lockdown 
restrictions towards the end of the period increasing uncertainty around the 
path to recovery. 
 
Capital growth for the Company's portfolio was 2.4 per cent over the period, 
driven by a 44.9 per cent weighting to Industrial and logistics properties, a 
sector for which investor demand strengthened still further, alongside a 
continuation of good news on occupational take-up. There was further downward 
pressure on valuations in the Company's high street retail portfolio 
(weighting: 9.2 per cent), reflective of continued worsening sentiment towards 
the sector, linked to lower rental recovery, and further high-profile tenant 
failures. The retail warehouse portfolio (weighting: 16.2 per cent) continues 
to be less affected, being let primarily to 'essential', convenience, and 
non-fashion occupiers. Market demand for long let foodstore assets was a factor 
behind the significant contribution to performance made by the development to a 
supermarket at Enterprise Way, Luton over the period. Debate around the future 
shape of the office market (weighting: 29.7 per cent) continues and there has 
been a drop off in leasing activity, particularly in London, which has again 
weighed on performance for this sector. 
 
The portfolio remains substantially let to a highly diverse tenant base. The 
allocation to Industrial, logistics and distribution assets in the south east 
and the absence of any exposure to the leisure and hospitality sectors are 
significant factors in the comparatively high level of the Company's rent 
collection. The focus remains on ensuring that rental income is recovered where 
it is due and can be paid, but also in working with our occupiers to deliver 
constructive outcomes in what are immensely challenging times for many 
businesses. 
 
Rent Collection 
 
We summarise below our current rent collection outcome for Quarter's 2 to 4 of 
2020 as well as providing an update on collection to date for Quarter 1 2021. 
 
Q2 to Q4 2020 collection (billed between 26 March 2020 and 1 December 2020) 
 
Overall collection over the nine-month period is at 94.4 per cent and the 
breakdown is detailed below: 
 
                        Rent Billed  Collected 
 
                        (£m)         (%) 
 
Quarter 2               4.1          93.6 
 
Quarter 3               4.0          94.1 
 
Quarter 4               4.3          95.5 
 
Total                   12.4         94.4 
 
Collection by sector: 
 
                                Rent Billed    Collected 
 
                                (£m)           (%) 
 
Industrial, logistics and       4.4            100.0 
distribution 
 
Offices                         3.6            100.0 
 
Retail Warehouse                2.7            96.3 
 
Retail                          1.7            66.3 
 
Total                           12.4           94.4 
 
Breakdown of uncollected rent: 
 
Total Outstanding       Rent Billed 
 
                        (£m)          (%) 
 
Agreed deferments       0.0           0.2 
 
Rent waived             0.3           2.2 
 
Unresolved / in         0.3           2.1 
discussion 
 
Bad Debts               0.1           1.1 
 
Uncollected Rent        0.7           5.6 
 
Quarter 1 2021 Collection (to be billed between 25 December 2020 and 1 March 
2021) 
 
The Company has billed c.£3.6m of its quarter 1 rent due from 25 December to 
date and has collected 82.1 per cent of this total amount (compared to 96.8 per 
cent for the same period last year and 83.2 per cent after the same number of 
days last quarter). This percentage will increase as tenants with whom we have 
agreed monthly payment arrangements, but have been billed quarterly, pay 
further instalments. The total quarterly rent amounts to c.£4.2 million with 
further contractual billing dates during the course of January and February. 
Given early progress, collection rates are expected to be similar to those for 
the previous quarter with many of the retail occupiers paying monthly. Such 
flexible payment terms have also been granted to selected occupiers within 
other sectors where it continues to be appropriate to offer cashflow assistance 
at this time. 
 
Collection by sector: 
 
                                Rent Billed    Collected 
 
                                (£m)           (%) 
 
Industrial, logistics and       1.5            93.0 
distribution 
 
Offices                         0.8            94.2 
 
Retail Warehouse                0.8            69.4 
 
Retail                          0.5            51.3 
 
Total                           3.6            82.1 
 
Breakdown of uncollected rent: 
 
Total Outstanding       Rent Billed 
 
                        (£m)          (%) 
 
Monthly payments*       0.2           6.0 
 
Rent waived             0.0           0.2 
 
Unresolved / in         0.4           11.7 
discussion 
 
Uncollected Rent        0.6           17.9 
 
*  tenants who have been billed for the quarter but are paying in monthly 
instalments. 
 
Cash and Borrowings 
 
The Company has approximately £14.1 million of available cash and an undrawn 
revolving credit facility of £20 million. The £90 million long-term debt with 
Canada Life and the undrawn loan facility with Barclays do not need to be 
refinanced until November 2026 and March 2025 respectively. As at 31 December 
2020, the LTV was 25.8 per cent and there was significant headroom under debt 
covenants. 
 
Dividend 
 
On 2 December 2020, the Company announced an increased quarterly dividend 
payment of 0.85 pence per ordinary share in respect of the financial year ended 
30 June 2020, which was paid to shareholders on 31 December 2020. The Board 
will continue to monitor rental receipts and earnings closely and keep the 
future level of dividends under review. 
 
Portfolio Analysis                                £m        % of  % capital 
                                                       portfolio      value 
                                                        as at 31  movement 
                                                        Dec 2020 in quarter 
 
Offices                                         94.3        29.7        0.5 
 
  * West End                                    28.0         8.8      (1.2) 
 
  * South East                                  39.0        12.3        2.4 
 
  * Rest of UK                                  27.3         8.6      (0.4) 
 
Industrial, logistics and distribution         142.7        44.9        4.9 
 
  * South East                                 142.7        44.9        4.9 
 
Standard Retail                                 29.3         9.2      (4.4) 
 
  * West End                                     7.1         2.2      (8.7) 
 
  * Rest of London                               1.8         0.6      (2.8) 
 
  * South East                                  14.9         4.7      (2.7) 
 
  * Rest of UK                                   5.5         1.7      (3.9) 
 
Retail Warehouse                                51.5        16.2        3.3 
 
Total Property                                 317.8       100.0        2.4 
 
Summary Balance Sheet 
 
                                                     £m   Pence    % of 
                                                            per     Net 
                                                          share  Assets 
 
Property Portfolio per Valuation Report           317.8   132.0   134.6 
 
Adjustment for lease incentives                   (3.4) 
                                                          (1.4)   (1.4) 
 
Fair Value of Property Portfolio                  314.4   130.6   133.2 
 
Cash                                               14.1     5.9     6.0 
 
Trade and other receivables                         6.8     2.8     2.9 
 
Trade and other payables                          (9.6)   (4.0)   (4.1) 
 
Interest-bearing loans                           (89.6)  (37.2)  (38.0) 
 
Net Assets at 31 December 2020                    236.1    98.1   100.0 
 
The property portfolio will next be valued by an external valuer during March 
2021 and the net asset value per share as at 31 March 2021 will be announced in 
April 2021. 
 
Important information 
 
The information contained within this announcement is deemed by the Company to 
constitute inside information as stipulated under the Market Abuse Regulations 
(EU) No. 596/2014. Upon the publication of this announcement via Regulatory 
Information Service this inside information is now considered to be in the 
public domain. 
 
 
 
Enquiries: 
The Company Secretary 
Northern Trust International Fund Administration Services (Guernsey) Limited 
Trafalgar Court 
Les Banques 
St Peter Port 
Guernsey 
GY1 3QL 
Tel: 01481 745001 
 
 
Peter Lowe 
Scott Macrae 
BMO Investment Business Ltd 
Tel: 0207 628 8000 
 
 
 
 
END 
 
 

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January 27, 2021 02:01 ET (07:01 GMT)

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