AXA Property Trust Net Asset Value 30 June 2016 (Unaudited)

 
TIDMAPT 
 
To:                   Company Announcements 
Date:                31 August 2016 
Company:         AXA Property Trust Limited 
Subject:            Net Asset Value 30 June 2016 (Unaudited) 
 
 
CAPITAL REDEMPTION 
 
-     During the Financial year ending 30 June 2016 the Company returned GBP16.2 
million capital to Shareholders (GBP5.2 million on 30 July 2015 and GBP11.0 million 
on 6 January 2016) bringing the total capital returned to Shareholders to GBP42.4 
million. 
 
-     Under the terms of the extension of the Company's debt facility from 1 
July 2016 to 31 December 2016, net sales proceeds and rents from the portfolio 
will be used to repay the debt in priority to shareholder distributions. 
 
CORPORATE SUMMARY 
 
-     The Company's unaudited Consolidated Net Asset Value as at 30 June 2016 
was GBP39.63 million and the NAV per share was 68.82 pence per share. This 
reflects an increase of GBP1.08 million (1.87 pence per share) compared to 31 
March 2016 when the Consolidated Net Asset Value was GBP38.55 million (66.95 
pence per share); 
 
-     The Company and its subsidiaries made a profit after tax of GBP2.30 million 
for the twelve month period ended 30 June 2016 and GBP0.72 million in the three 
month period ended 30 June 2016. 
 
MANAGED WIND-DOWN STATUS 
 
-     The Company continues to progress the managed wind-down of its portfolio 
with a view to realising its investments in a manner that achieves a balance 
between maximising the value from the Company's investments and making timely 
returns of capital to shareholders. 
 
-     During the Year ended 30 June 2016 the Trust completed the sale of the 
asset in Venray, The Netherlands and of the asset in Fuerth, Germany. 
 
-     During the quarter ending 30 June 2016 contracts were signed for the sale 
of the Dasing asset. The sale was completed post-quarter and the net disposal 
proceeds received on the 25 August 2016 have been allocated to the 
reimbursement of the debt. 
 
-     Of the remaining [three] assets, during the quarter ending 30 June 2016 
asset management initiatives continued on the Rothenburg asset in order to 
prepare the asset for sale, and marketing commenced post-quarter. 
 
-     The two Italian assets continued to be marketed on an individual basis. 
 
-     Year end 2016 has been the target for the completion of all sales, 
however at present it is considered that the sales programme of the remaining 
assets is more likely to complete in the first half of 2017. 
 
PORTFOLIO UPDATE 
 
Country Allocation at 30 June 2016 (by value) 
 
Country                         % of portfolio 
 
Germany                                   53% 
 
Italy                                          47% 
 
Sector Allocation at 30 June 2016 (by value) 
 
Sector                           % of portfolio 
 
Retail                                        40% 
 
Industrial                                   34% 
 
Leisure                                      26% 
 
MARKET UPDATE 
 
Eurozone - Economic environment 
 
Eurozone real gross domestic product grew by 0.6% Quarter-on-Quarter (QoQ) in 
Q1 2016, more than expected. Growth was principally driven by unexpected 
improvements in private spending and investment activity. The contribution of 
net exports continued however to be negative for the third quarter in a row. 
Among major Eurozone countries, Spain showed the strongest GDP growth (+0.8% 
QoQ), followed by Germany (+0.7% QoQ) and France (+0.6% QoQ). Italy's growth 
was moderate, although positive and in slight acceleration (+0.3% QoQ). 
 
Domestic demand is expected to remain the key driver of Eurozone growth; 
external demand, given recent economic difficulties faced by emerging markets, 
does represent a potential drag on expansion. Improvements in employment and 
earnings, as well as subdued inflation continue supporting disposable household 
income and thus private consumption. In Q2 2016 consumption is estimated to 
have marginally slowed (+0.3% QoQ), as some temporary effects faded away. Over 
the rest of 2016, consumption is expected to continue its recent trend rate 
(+0.4% QoQ) resulting, according to Ifo, INSEE and Istat, in an overall growth 
rate of 1.7%. 
 
Eurozone growth in investment amounted to +0.8% QoQ in Q1, but is, according to 
Ifo, expected to decelerate to +0.5% QoQ in Q2 2016, along with the general 
slowdown in economic activity. Productive investment is likely to be supported 
by steady improvements in activity and the financial situation of businesses. 
Furthermore, the new ECB Corporate Sector Purchase Programme should continue 
easing already favourable financing conditions. Accordingly, investment is 
expected to gradually accelerate. 
 
The result of the UK referendum has inevitably increased uncertainty over 
economic growth prospects in the Eurozone: while the short run impact on the 
activity of the area, via the trade channel, should be limited until Q4 2016, 
the medium term effect strongly depends upon the timing of the UK's exit and 
the future trade agreements to be negotiated between UK and the EU. 
 
All in all, Eurozone GDP is, according to Ifo, INSEE and Istat, expected to 
expand by 0.3% in Q2 2016 and by 0.4% in Q3. In Q4 the BREXIT effects are 
likely to drive slowdown in momentum reducing annual average GDP growth for the 
year to nearer 1.6% , slightly weaker than growth seen in 2015 (+1.7%). Under 
the assumption that oil prices remain stable at $49 per barrel, and the Dollar/ 
Euro exchange rate fluctuates around 1.12 USD per EUR, inflation is expected to 
moderately increase during the rest of the year, bringing the annual average to 
+0.3%. 
 
The German economy had a positive start to 2016, with Q1 GDP growth 
accelerating materially compared to late 2015. The industrial sector showed 
strong momentum in January, a notable loss in momentum was however visible 
throughout Q1 2016. The German economy grew at a seasonally-adjusted 0.7% QoQ 
in Q1 2016, accelerating from a 0.3% QoQ expansion in the previous quarter. 
Growth was mainly driven by household spending with foreign trade having a 
slight downward effect on growth. After a weak start to the second quarter, 
German business sentiment improved, with the Ifo Business Climate Index rising 
to 108.7 points in June from 107.8 points in May (seasonally adjusted).  The 
German economy is expected to continue rebalancing over  the  coming  years and 
both private and government consumption should remain key drivers for growth. 
Rising wage costs are likely however to place pressure on company profit 
margins. 
 
The Italian economy grew by 0.3% QoQ in the three months to March of 2016 
compared to a 0.2% QoQ expansion in the previous period. Growth was mainly 
driven by household expenditure and an accumulation of inventories, counter 
balanced by a slump in exports. Overall, GDP grew by 1.0% YoY in Q1 2016. The 
constitutional referendum, taking place in late 2016 represents a key risk to 
the economic outlook and Prime Minister Matteo Renzi has pledged to resign if 
he loses the referendum. The latest polls suggest the outcome is finely 
balanced and a resignation by Matteo Renzi could, given most recent polls, 
potentially lead to the Five Star Movement winning an absolute majority in 
subsequent general elections. A period of uncertainty and a further delay in 
the implementation of crucial reforms would most likely dampen prospective 
economic growth. Furthermore, a high stock of non-performing loans on Italian 
banks' balance sheets present further shock risks to the economy with many 
retail investors exposed to these instruments believing them to be a secure as 
bank deposits. 
 
Italian Logistics Market 
 
According to CBRE and as at Q2 2016, prime rents stand at EUR52.00/sq m/year in 
Rome and at 50/sq m/year in Milan. RCA reported real estate investment volumes 
into the industrial [sector?] of EUR246m over Q2, this excluding the EUR535m sale 
concerning 300 Enel buildings. The quarter also saw a slight decrease in prime 
yields to 6.4%, both in Milan and Rome, representing a decline of 10bps QoQ in 
both cases. According to CBRE, yields are now down 60bps compared to Q2 2015 in 
both city markets reflecting increased demand from international investors. 
 
German Retail Market 
 
The first half of 2016 saw the signing of retail lease contracts representing 
over 236,500 sq m of retail space, broadly similar to levels seen in the first 
half of 2015. More than two-thirds of all rental contracts were concluded by 
international retailers. According to CBRE German prime retail rents remained 
largely stable over the second quarter of 2016 although Berlin recorded prime 
rental growth of 1.5%. Retail real estate investment volumes amounted to 
approximately EUR4.1bn in the first half of 2016 whilst JLL recorded prime high 
street yields in the Big 7 centres at 3.70% following a further, albeit slight, 
decline (by 5 basis points). Yields for shopping centres and retail parks fell 
by 15 basis points respectively to 4.10% and 5.10%. 
 
German Logistics Market 
 
During the first six months of 2016, Germany saw a logistics and industrial 
take up of on aggregate 3.3m sq m with the second quarter being the strongest 
quarterly result ever recorded. Occupier and developers are particularly active 
in secondary locations with nearly all of the deals exceeding 20,000 sq m 
having taken place in these locations. Overall, CBRE expects an all-time record 
take-up of 6.5m sq m for 2016. Prime rents remained stable year-on-year, with 
the exceptions of Munich and Berlin where both markets recorded significant 
rent increases of approximately 3.3% and 0.9% respectively. At EUR2.1bn, the 
transaction volume for German logistics properties over the first two quarters 
of 2016 has exceeded the previous entire year's volume by 45% and recorded a 
new half-year record.  The lack of prime products increasingly results in a 
shift of investors to a riskier set of existing properties as well as locations 
outside the top investment locations. The gross initial yield in the prime 

segment of the top markets declined by 65 basis points over the last 12 months 
to an average of 5.65%. Munich and Berlin saw prime yields of 5.3% and 5.4% 
respectively. Smaller cities, such as Bremen, Leipzig, Kassel and Nuremberg, 
saw yields standing at 5.85%. 
 
CONSOLIDATED PERFORMANCE SUMMARY 
 
                                 Unaudited       Unaudited 
 
                               9 months ended 12 months ended 
 
                               31 March 2016   30 June 2016      Quarterly 
                                                                  Movement 
 
                                 Pence per       Pence per    Pence per share 
                                  share          share             /(%) 
 
Net Asset Value per share          66.95           68.82        1.87    2.80% 
 
Share price (mid-market)           53.88           55.13        1.25    2.32% 
 
Share price discount to Net        19.5%           19.9%       0.4 percentage 
Asset Value                                                        points 
 
 
 
Total Return per Share              Audited         Unaudited 
 
                                12 months ended  12 months ended 
 
                                  30 June 2015     30 June 2016 
 
Net Asset Value Total Return         -5.4%            13.1% 
 
Share Price Total Return 
 
- AXA Property Trust                 10.5%            29.6% 
 
- FTSE All Share Index                2.6%             2.2% 
 
- FTSE Real Estate Investment        19.5%            -8.3% 
Trust Index 
 
Source: AXA Investment Managers UK Limited and Stifel Nicolaus 
Europe Limited. 
 
Total net profit was GBP2.30 million (2.11 pence per share) for the twelve months 
to 30 June 2016, including -GBP1.43 million of "revenue" loss (excluding capital 
items such as revaluation of property) and GBP3.73 million "capital" gain, 
analysed as follows: 
 
                                                    Unaudited        Unaudited        Unaudited 
 
                                                  9 months ended   3 months ended  12 months ended 
 
                                                  31 March 2016     30 June 2016     30 June 2016 
 
                                                     GBPmillion         GBPmillion         GBPmillion 
 
Net property                                           2.27            (0.23)            2.04 
income 
 
Net foreign exchange (losses) / gains                 (0.30)            0.10            (0.20) 
 
Investment Manager's fees                             (0.26)            0.04            (0.22) 
 
Other income and expenses                             (2.28)            0.01            (2.27) 
 
 
Net finance                                           (0.65)           (0.13)           (0.78) 
costs 
 
Revenue loss                                          (1.23)           (0.21)           (1.43) 
 
Unrealised / gains on revaluation of investment        1.39             0.84             2.24 
properties 
 
Net gain on disposal of investment properties          1.08             0.02             1.10 
 
Net gains on derivatives                               0.53             0.11             0.63 
 
Share in losses of Joint Venture                      (0.21)           (0.11)           (0.32) 
 
Finance costs                                         (0.00)           (0.00)           (0.00) 
 
Net foreign exchange losses                           (0.02)             -              (0.02) 
 
Deferred tax                                           0.03             0.07             0.11 
 
 
Capital profit                                         2.81             0.93             3.73 
 
Total profit                                           1.58             0.72             2.30 
 
NET ASSET VALUE 
 
The Company's unaudited Consolidated Net Asset Value as at 30 June 2016 was GBP 
39.63 million (68.82 pence per share) an increase of GBP1.08 million compared to 
Net Asset Value as at 31 March 2016 of GBP38.55 million. 
 
The Net Asset Value attributable to the Ordinary Shares is calculated under 
International Financial Reporting Standards. It includes all current year 
income after the deduction of dividends paid prior to 30 June 2016. 
 
The GBP1.08 million increase in Net Asset Value over the quarter ended 30 June 
2016 can be analysed as follows: 
 
                                                                         Unaudited        Unaudited        Unaudited 
 
                                                                       9 months ended   3 months ended  12 months ended 
 
                                                                       31 March 2016     30 June 2016     30 June 2016 
 
                                                                          GBPmillion         GBPmillion         GBPmillion 
 
Opening Net Asset                                                          49.37            38.55            49.37 
Value 
 
   Net (loss) / profit after tax                                            1.58             0.72             2.30 
 
   Unrealised movement on                                                   0.57             0.18             0.75 
derivatives 
 
   Share Redemption                                                       (16.19)            0.00           (16.19) 
 
   Foreign exchange translation losses                                      3.23             0.17             3.40 
 
Closing Net Asset Value                                                    38.55            39.63            39.63 
 
On a like-for-like basis the Euro valuation of the property portfolio decreased 
by 1.31% to EUR 56.30 million for the quarter. In Sterling currency terms, the 
property valuation was GBP46.79 million (including the effects of valuation 
movements, capital expenditure and foreign exchange movements). The GBP/EUR 
foreign exchange rate applied to the Company's Euro investments in its 
subsidiary companies at 30 June 2016 was 1.20 (31 March 2016: 1.26). 
 
SHARE PRICE AND DISCOUNT TO NET ASSET VALUE 
 
As at close of business on 30 June 2016, the mid-market price of the Company's 
shares on the London Stock Exchange was 53.13 pence, representing a discount of 
19.9% on the Company's Net Asset Value at 30 June 2016. 
 
As at close of business on 30 August 2016, the mid market price of the 
Company's shares was 56.12 pence, representing a discount of 18.5% on the 
Company's Net Asset Value at 30 June 2016. 
 
FUND GEARING 
 
                               Unaudited       Unaudited 
 
                             31 March 2016   30 June 2016      Movement 
 
                             GBPmillion / %    GBPmillion / %    GBPmillion / % 
 
Property portfolio *             45.23           46.79         1.56 3.3% 
 
 
Borrowings                       14.24           14.93         0.69 4.6% 
 
Total gross gearing              31.5%           31.9%      0.4 percentage 
                                                                points 
 
Total net gearing **             27.2%           26.5%      -0.8 percentage 
                                                                points 
 
* Based on the portfolio's independent market valuation, 
including that of the Company's share in the Agnadello 
property 
 
** Net Gearing is calculated as overall debt, net of unallocated cash held 
by the Group over the portfolio at fair value 
 
The variation of the amount of borrowings is due to foreign exchange impacts. 
No debt reimbursement or drawing occurred during the quarter. 
 
In view of the targeted disposal timetable for the Company's remaining real 
estate assets AXA Property Trust concluded an extension of the Company's loan 
facility until 31st December 2016. Under the terms of the extension disposal 
proceeds and net rents will be allocated to debt reimbursement in priority to 
shareholder distribution. 
 
Fund gearing is included to provide an indication of the overall indebtedness 
of the Company and does not relate to any covenant terms in the Company's loan 
facilities. Gross gearing is calculated as debt over property portfolio at fair 
value. Net gearing is calculated as debt less unallocated cash over property 
portfolio at fair value. 
 
As the wind down progresses, the level of gearing will continue to decrease as 
proceeds from sales are used to reduce debt over the next 6 months. 
 
LOAN FACILITIES 
 
Gross Loan to Value (LTV)         Unaudited       Unaudited 
Covenants 
 
                                31 March 2016   30 June 2016       Maximum 
 
Main loan facility                  42.6%           42.6%          60.00% 
 
As at 30 June 2016, the loan-to-value ratio on the main facility was 42.6% 
based on the bank's independent valuation of the property portfolio. 
 
Interest Cover Ratio at 30      Historic      Minimum    Projected   Minimum 
June 2016 
                               (Unaudited)              (Unaudited) 
 
Main loan facility covenant      332.0%       200.0%      297.3%     185.00% 
 
Interest Cover Ratio (ICR) is calculated as net financing expense payable as a 
percentage of net rental income less movement in arrears. 
 
CASH POSITION AND CAPITAL EXPITURE 
 
GBP9.44 million cash was held by the Group, including the Company's share of the 
cash in the Agnadello JV as at 30 June 2016. 
 
The Company is currently holding GBP5.8 million (EUR7.0 million) as reserve to 
cover any potential claim on Representations & Warranties granted on assets 
which have previously been sold. It is intended that a master insurance policy 
will be secured to cover these potential obligations and when this is concluded 
these funds will largely be available for the reimbursement of the outstanding 
debt facility. 
 
MATERIAL EVENTS 
 
The disposal proceeds of Dasing were received on the 25th August 2016 in the 
amount of EUR7.45 million. After disposal and ancillary expenses EUR6.5 million 
will be allocated to the loan reimbursement and other financing costs. 
 
Except for those noted above, the Board of the Company is not aware of any 

significant event or transaction which occurred between 30 June 2015 and the 
date of the publication of this Statement which would have a material impact on 
the financial position of the Company. 
 
Company website: 
 
http://www.axapropertytrust.com 
 
All Enquiries: 
 
Real Estate Adviser 
AXA Real Estate Investment Managers UK Limited 
Broker Services 
7 Newgate Street 
London EC1A 7NX 
Tel: [phone] 
Email: [e-mail] 
 
Broker 
Stifel Nicolaus Europe Limited 
150 Cheapside 
London EC2V 6ET 
Tel: [phone] 
 
Company SecretaryNorthern Trust International Fund Administration Services (Guernsey) Limited 
PO Box 255 
Trafalgar Court 
Les Banques 
St Peter Port 
GY1 3QL 
Tel: [phone] 
 
 
 
END 
 

(END) Dow Jones Newswires

August 31, 2016 06:58 ET (10:58 GMT)