TIDMHLCL
RNS Number : 5375N
Helical PLC
25 September 2019
25 September 2019
HELICAL PLC
("Helical" or the "Company")
Trading Update for the Period Since 1 April 2019
Helical today provides a portfolio and a trading update for the
period 1 April 2019 to 24 September 2019 ("the Period"), in advance
of today's tour of its City and Tech Belt properties for analysts
and investors.
Commenting on the Company's activities, Gerald Kaye, Chief
Executive, said:
"The first half of the year has shown continued letting success,
achieving rents at a premium to 31 March 2019 ERVs and
demonstrating the underlying quality of the portfolio. The
acquisition of 33 Charterhouse Street, in joint venture, adds to
the pipeline and supports our view that interesting opportunities
can still be found.
"The completion of the amended and restated GBP400m revolving
credit facility ("RCF") in the Period, which refinanced the GBP200m
development facility at The Bower and the existing GBP150m RCF, had
the benefit of both extending the Group's average debt maturity
whilst reducing its cost of debt."
Operational Performance
Acquisitions
-- On 17 May 2019, we acquired 33 Charterhouse Street, a
c.195,000 sq ft office development site located in Farringdon,
London EC1, in a 50:50 Joint Venture with AshbyCapital.
Lettings
-- During the Period we have completed 15 new office lettings in
London, representing 133,218 sq ft, delivering contracted rent of
GBP9.8m (Helical's share GBP3.0m at 6.3% above 31 March 2019 ERV),
including:
- 82,459 sq ft let to The University of Chicago Booth School of
Business, InfraRed Capital Partners and
Sopra Steria at One Bartholomew, EC1;
- Letting of the 14(th) floor, representing 9,568 sq ft, to
Snowflake on a 'Plug & Play' basis and the
16(th) floor, representing 11,306 sq ft, to Incubeta at The Tower, EC1;
- 7,564 sq ft let to Sia Partners across the fourth and fifth
floors at 90 Bartholomew Close, EC1;
- Six new lettings at Power Road Studios, W4, representing 16,160 sq ft; and
- Three new lettings of 6,161 sq ft at The Loom, E1.
-- In Manchester we have completed three new lettings at
Churchgate & Lee to Capita Business Services representing
35,118 sq ft, in line with 31 March 2019 ERVs. We have also
completed two new lettings of 4,524 sq ft at Fourways House at
12.7% above 31 March 2019 ERVs.
Other Portfolio Matters
-- We have completed the sale of a further two residential units
in Phase One at Barts Square, EC1, leaving just eight residential
units available for sale. In Phase Two we have exchanged contracts
for the
sale of a further seven units, taking the total number of units exchanged to 44.
-- The sale of our 10% shareholding in the One Creechurch Place
joint venture to HOOPP and the return of the equity invested in the
scheme took place on 6(th) September 2019, completing our
involvement in the
development and generating net proceeds of circa GBP20m.
London Portfolio
33 Charterhouse Street, EC1
We acquired in a 50:50 joint venture with AshbyCapital the long
leasehold interest in a major development site in the heart of
Farringdon, further growing our presence in this vibrant area. The
site is situated on the corner of Charterhouse Street and
Farringdon Road, just 100m from Farringdon Station and 350m from
our development, Kaleidoscope, at the opposite end of the
Farringdon Elizabeth Line platform.
The site has an existing planning consent for c.195,000 sq ft of
offices and ground floor retail and work is currently being
undertaken to enhance the existing design. Demolition has already
been undertaken and the site is now vacant. Construction will
commence later this year with completion anticipated early in
2022.
The Bower, EC1
The Bower is a landmark estate immediately adjacent to the Old
Street roundabout and features 312,575 sq ft of innovative, high
quality office space along with 20,606 sq ft of restaurant and
retail space. The Warehouse comprises 122,858 sq ft of offices and
The Studio 18,283 sq ft of offices with 10,298 sq ft of retail
space at the two buildings, all of which is currently let. The
Tower, completed in August 2018, offers 171,434 sq ft of office
space with a contemporary façade and innovatively designed
interconnecting floors, along with 10,308 sq ft of retail space
across two units.
In the Period we have let the 14(th) floor on a new 'Plug &
Play' lease to Snowflake, provider of the data warehouse built for
the cloud, and 16(th) floor to Incubeta, a multi-national marketing
group. Following this letting, The Tower is now 82% let.
Barts Square, EC1
In a joint venture with The Baupost Group LLC, Helical owns the
freehold interest of Barts Square, a 3.2 acre site between St
Paul's and Smithfield Market, consisting of 236 residential
apartments, three office buildings of 214,434 sq ft, 24,013 sq ft
and 10,286 sq ft together with 21,330 sq ft of retail/A3 at ground
floor as well as major public realm improvements.
-- In the Period we have completed on the sales of two
residential units in Phase One, leaving just eight apartments to
sell.
-- Construction works on Phase Three continue to progress with
the 92 apartments and 11,815 sq ft of retail space due tocomplete
in phases from October 2019. We have exchanged contracts on seven
more units in the Period taking the total number of exchanged units
to 44, leaving 47 units left to sell and one additional unit to be
released at a later date.
-- At 90 Bartholomew Close, an office refurbishment of 24,013 sq
ft, we have completed the letting of the fourth and fifth floors to
Sia Partners, taking the building to 61% let. The third and sixth
floors are now under offer, leaving just the fully fitted second
floor to let.
-- At One Bartholomew, a new 214,434 sq ft office building
within Phase Two of Barts Square sold to clients of AshbyCapital,
we have let the ground, first and second floor to The University of
Chicago Booth School of Business, the sixth floor to Sopra Steria
and the seventh floor to InfraRed Capital Partners, taking the
building to 73% let. Two of the three remaining floors are under
offer.
-- The refurbishment of 55 Bartholomew Close is ongoing and will
provide 10,286 sq ft of offices, with completion expected in
October 2019.
Kaleidoscope, EC1
The over-station development at the Farringdon East Elizabeth
Line station will comprise a six storey 86,183 sq ft office
building, with a 2,497 sq ft restaurant unit on the ground floor.
Work is ongoing and handover is expected in January 2020.
Power Road Studios, W4
The site comprises 57,585 sq ft of offices across four studio
buildings and is multi-let to a wide range of predominantly media
tenants. In the Period we have completed six lettings representing
16,160 sq ft, at a 10.8% average premium to 31 March 2019 ERVs,
including:
-- 5,495 sq ft to Taxify, a digital transportation business;
-- 1,971 sq ft to Kobayashi, a Japanese wholesaler;
-- 7,135 sq ft across two units to So Energy, a green energy provider;
-- 560 sq ft to Richard Jacksons Garden;
-- 999 sq ft to Stem Healthcare; and
-- The recently refurbished café to Metro Foods.
The Loom, E1
At this 108,640 sq ft former Victorian wool warehouse we
continue to undertake careful asset management resulting in the
letting of three units at a premium to 31 March 2019 ERVs and
taking the building to 97% let.
The Manchester Portfolio
Churchgate & Lee, Manchester
This asset comprises 244,627 sq ft of multi-let offices. In the
Period we have completed the lettings of the recently refurbished
third floor in Churchgate House and the sixth and seventh floors in
Lee House to Capita Business Services. Following the completion of
these lettings the building is now fully let.
Trinity, Manchester
Trinity, purchased in May 2017 for GBP12.9m, underwent a full
redevelopment which completed in January 2019. The repositioned
building comprises 54,651 sq ft of office space and 4,300 sq ft of
retail/restaurant space.
Fourways House, Manchester
This 59,067 sq ft Grade 2 listed former packing warehouse was
acquired in July 2018 for GBP16.5m. We have begun to apply our
asset management skills and have let two units in the Period at an
12.7% premium to 31 March 2019 ERVs. We have recently obtained
planning permission to undertake a significant refurbishment of the
atrium and common parts and works will commence shortly.
35 Dale Street, Manchester
35 Dale Street is a 55,243 sq ft office building situated in the
Northern Quarter of Manchester, which underwent a comprehensive
refurbishment that completed in June 2018. Couchbase have taken
occupation of the newly reconfigured loading bay during the
Period.
Financing
In the Period we entered into an amended and restated GBP400m
revolving credit facility ("RCF") with four lenders, Barclays Bank
PLC, HSBC UK Bank plc, National Westminster Bank Plc and Wells
Fargo Bank N.A., London Branch. The new facility, initially
repayable in July 2024, has two one-year extension options which,
if exercised, would extend the repayment date to July 2026.
The facility replaces the existing GBP150m RCF and the GBP200m
development facility on the Company's largest asset, The Bower,
London, EC1, both of which have been repaid (to the extent drawn).
The terms of the new RCF allow drawdowns of up to 60% of value and
on completion the facility was GBP221m drawn (at 47% LTV), leaving
GBP179m available for future acquisitions.
At 24 September 2019, the Company's bank facilities
comprised:
-- GBP493m of investment facilities of which GBP314m was drawn
down. These borrowings have an average maturity of 4.9 years, which
increases to 6.3 years on exercise of options to extend the GBP400m
RCF, and a weighted average cost of 3.25%;
-- GBP50m of development facilities with a maturity of 3.9 years
and a weighted average interest rate of 5.0%. Excluding the impact
of commitment fees, the weighted average interest rate of this
facility is 4.2%; and
-- A share of a bank facility in joint ventures of GBP52m of
which GBP48m was drawn down. This facility has a maturity date of
31 December 2021 and a weighted average cost of 4.0%.
The five year GBP100m Convertible Bond with a 4.0% coupon was
repaid on 18 June 2019. This repayment reduces the Company's gross
annual finance costs by GBP4.0m.
Board Appointments
In June 2019, the Board was pleased to be joined by Sue Farr as
an independent Non-Executive Director and a member of the Audit and
Risk, Nominations and Remuneration Committees. Sue brings
considerable experience in marketing, branding and consumer issues
to the Board.
For further information, please contact:
Helical plc
Gerald Kaye (CEO) Address: 5 Hanover Square, London
W1S 1HQ
Tim Murphy (Finance Director) Website: www.helical.co.uk
Tel: 020 7629 0113
FTI Consulting
Dido Laurimore/Richard Gotla Tel: 020 3727 1000
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END
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