Circle Property PLC Valuation and Trading Update and Acquisition (1511M)
April 26 2018 - 1:00AM
UK Regulatory
TIDMCRC
RNS Number : 1511M
Circle Property PLC
26 April 2018
26 April 2018
Circle Property Plc
("Circle" or the "Company")
VALUATION AND TRADING UPDATE AND ACQUISITION
22.6% valuation uplift reflecting continued asset management
success and strong supply-demand dynamics in regional office
markets
Circle Property Plc, a specialist regional UK property
investment, development and management company, provides the
following update on trading ahead of its preliminary results for
the 12 months ended 31 March 2018, which it intends to announce in
June 2018. In addition, the Company announces the GBP4.2 million
acquisition of 710 & 720 in Aztec West Business Park, which is
Bristol's premier business park.
Continued strong portfolio valuation growth
-- The Company's focus on active asset management initiatives
has continued to deliver significant growth in the value of
Circle's portfolio.
-- On a macro level, the Company continues to benefit from the
ongoing buoyant demand for space in well located office assets in
regional cities, at a time when supply continues to reduce through
permitted development rights.
-- As at 31 March 2018, the portfolio was independently valued
at GBP114.025 million, up 22.6% since 31 March 2017 (GBP93.025
million) and up 54.31% since IPO in February 2016 respectively. The
strong momentum achieved in the first half, continued through the
second half.
Asset management success driving income growth
-- Circle achieved significant growth in annual contracted rents
which were up 21.49% to GBP6,829,243 over the year (2017:
GBP5,621,233), of which:
o 50% is attributable to the leasing of refurbished space in the
Company's redevelopment pipeline;
o 21% is attributable to lease renewals within its core
portfolio; and
o the remaining 28% is as a result of the acquisition at Aztec
West.
-- Estimated Rental Values across the portfolio increased by
12.45% to GBP9,925,069 pax. This underlines the potential future
income growth generation from the Company's assets as this
reversion is captured and recently refurbished vacant space is
leased.
-- Occupancy across the Company's portfolio excluding completed
developments, remained high at 99%, reflecting the demand for
office space in strong regional cities across the UK.
-- The leisure elements at the Somerset House development in
Birmingham are now fully occupied. Camerons Brewery has signed a 20
year lease with 15 years to first break on a 5,424 sq ft restaurant
at a rent of GBP175,000 per annum. Moreover, strong interest has
been received for the recently refurbished office space on the
upper floors.
Acquisition of additional buildings at Aztec West in Bristol
provides further opportunity for value creation
-- In an off-market transaction Circle has completed the GBP4.2
million acquisition of 710 & 720 Aztec West Business Park,
adding to the Company's holdings within Bristol's premier business
park, where it already owns a fully leased 13,258sq ft unit (number
135). The acquisition price represents a net initial yield of 7.9%.
The properties are fully let with a weighted unexpired lease term
of 4.85 years and generate a total passing rent of GBP351,573 per
annum.
-- The acquisition was funded through a GBP5 million extension
to the Company's existing GBP50 million loan facility with RBS.
John Arnold, CEO of Circle Property Plc, commented:
"2017 was another strong year for Circle. We continue to see
strong demand for high quality office space in our key markets.
Supply continues to diminish as more offices convert to
residential. Indeed, in Bristol the office supply has shrunk by 17%
over the last year.
There is a clear opportunity to achieve further gains by
capturing rental reversion as we lease up the vacant space in our
redevelopment pipeline and through reviews and renewals across the
under-rented elements of the portfolio.
The recent acquisition at Aztec West provides us with another
high quality asset from which we believe we can create additional
value. We continue to see a strong pipeline of opportunities that
we are keen to progress."
This announcement is inside information for the purposes of
Article 7 of EU Regulation 596/2014.
ENDS
+44 (0)20 7930
Circle Property Plc 8503
John Arnold, CEO
Edward Olins, COO
+44 (0) 20 7131
Smith & Williamson 4000
Azhic Basirov
Katy Birkin
Radnor Capital
Iain Daly +44 (0) 20 3897
Joshua Cryer 1830
+44 (0)20 3727
FTI Consulting 1000
Giles Barrie
Richard Sunderland
Eve Kirmatzis
This information is provided by RNS
The company news service from the London Stock Exchange
END
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