Circle Property PLC Trading Update and Disposal (3978R)
March 08 2021 - 01:00AM
UK Regulatory
TIDMCRC
RNS Number : 3978R
Circle Property PLC
08 March 2021
8 March 2021
Circle Property Plc
("Circle", the "Company" or the "Group")
Trading Update and Disposal
Circle Property Plc (AIM: CRC), which invests in, develops and
actively manages well-located regional office assets, is pleased to
provide the following update.
Rent Collection
Since the outbreak of the COVID-19 pandemic in March 2020, we
have continued to actively engage with our tenants which has
resulted in an average rent collection of 90.5%. Rent collection
for the quarter ended December 2020 has improved since last
reported and now stands at 92% and for the current quarter stands
at 84%.
The majority of the arrears are attributable to the Company's
limited retail assets - two public houses and one restaurant in
central Birmingham. The tenants remain solvent and the businesses
are expected to re-open when lockdown restrictions are lifted and
legislation permits, after which time we expect the majority of the
arrears to be paid.
Our rental income has been increasing throughout the year as
rent free periods on more recently granted leases come to an end
and net income now stands at GBP7.9m per annum - over GBP1m more
than at the start of the financial year. Our offices remain
under-rented which in turn means that tenants are less likely to
operate break clauses, making our income more robust in these
testing times.
Lettings and Tenant Demand
The Company is pleased to report that it has pre-let 135 Aztec
West, Bristol to Fertility Bristol Ltd on a 15- year lease with a
tenant break option at the end of the 11(th) year. As previously
reported, the building is being refurbished at a cost of GBP1.5m.
The property was vacated by Davies & Partners in mid-January
2021 and refurbishment works which commenced at the end of January,
are expected to be completed by June 2021. The 13,800 sq ft
building will generate an income of GBP296,893 per annum (GBP21.50
p.s.f).
As anticipated, the number of viewings has increased as we
approach the expected end of lockdown restrictions. It has been
noted that tenants, being reluctant to fund expensive office
fit-outs, are now preferring to take on fully fitted space in the
regions, generally where a tenant has recently vacated and has
either left all fixtures and fittings in place or where the
landlord has provided a good quality Category B fit out. Having
identified this trend, we have been undertaking our own fit-outs of
some of our vacant suites within our portfolio at Birmingham and
Maidenhead and are pleased to report a notable increase in viewings
and requests for letting proposals on these suites. These works
have been funded from working capital.
Disposal
The Company is pleased to report that it has exchanged contracts
to sell Power House, Davy Avenue, Milton Keynes to Stephen Eagell
Group, the largest Toyota Dealership in Europe, the current tenants
within the building, who will hold the building for their continued
occupation and part investment. The sale price of GBP3.55m
represents a 9.23% increase on the September 2020 valuation of
GBP3.25m and the disposal will complete before the financial
year-end at the end of March 2021.
John Arnold, CEO of Circle Property Plc, commented:
"From our direct experience during the period, we are pleased to
see that there is plenty of activity in the regional office sector,
with strong demand for well designed office space, which provides
office workers with flexible, safe environments. We believe that as
the UK progresses out of the pandemic, office workers will be keen
to return to the workplace and we aim to ensure that our offices
provide attractive working conditions fit for the future."
+44 (0)207
Circle Property Plc 930 8503
John Arnold, CEO
Edward Olins, COO
+44 (0)207 397
Cenkos Securities 8900
Katy Birkin
Mark Connelly
+44 (0)203 897
Radnor Capital 1830
Joshua Cryer
Iain Daly
+44 (0)203 757
Camarco 4992
Ginny Pulbrook
Oliver Head
About Circle Property Plc
Circle is amongst the best performing quoted UK real estate
companies by NAV total return (NAV growth and dividend) having
delivered consistent returns with 101% NAV growth since IPO in 2016
in absolute terms.
Circle focusses on acquiring assets in regional cities, many of
which have significant office supply constraints, and on office
assets with active management potential (refurbishment
opportunities, under-rented or vacant properties or short leases),
rather than just maximising initial rental yields.
Circle is not a Real Estate Investment Trust (REIT) and can
actively recycle proceeds from asset sales into its refurbishment
and redevelopment pipeline, as well as future investment
opportunities, therefore targeting a broader range of returns for
shareholders, which are primarily driven by NAV growth.
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