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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| F&c Commercial Property Trust Limited | LSE:FCPT | London | Ordinary Share | GG00B4ZPCJ00 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 121.20 | 121.40 | 121.60 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
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TIDMBCPT
Date: 21 September 2022
From: Balanced Commercial Property Trust Limited
LEI: 213800A2B1H4ULF3K397
(Classified Regulated Information, under DTR 6 Annex 1 Section 1.2)
Interim Report for the Period ended 30 June 2022
Headlines
* Share price total return* of 8.3 per cent for the period.
* Net asset value total return* of 11.7 per cent for the period.
* Dividend yield* of 4.1 per cent based on 30 June 2022 share price.
* 99.0 per cent rent collection for the six month period.
* As at 30 June 2022, the void rate was 6.5 per cent, excluding property
being developed or refurbished, which compares to a rate of 2.0 per cent at
the start of the calendar year. This is primarily due to the tenant
vacating at Stockley Park, Uxbridge where an appraisal of redevelopment
options for higher-value alternative uses is underway.
* The Company's portfolio produced a total return* of 9.7 per cent versus the
MSCI UK Quarterly Property Index ('MSCI') return of 7.8 per cent.
* Outperformed the index on both income and capital returns over the period.
* Significant asset management across the portfolio driving rental growth and
capital returns.
* See Alternative Performance Measures
Chairman's Statement
The year began on a positive note as the worst of the Covid pandemic appeared
to have passed and capital markets were more buoyant. UK real estate sustained
a period of positive performance as confidence continued to build across the
occupational and investment markets. However, the last few months have seen a
marked shift in sentiment as economic headwinds have mounted as the year has
progressed. Geopolitical instability has compounded inflationary pressures
which, together with increased interest rates, is weighing on economic activity
and consumer confidence.
Whilst we now again find ourselves in a period of heightened uncertainty, our
balanced portfolio of high-quality assets in recognised locations has served us
well as a combination of pricing resilience and the execution of accretive
asset management strategies has driven portfolio outperformance over the first
six months of 2022.
Work undertaken in 2021, consistent with our strategy to rebalance sector
exposures, has served to align the portfolio more towards growth sectors. The
period has seen further investment into redevelopment strategies and forward
purchase commitments. Such initiatives form part of the Company's strategy to
deliver sustained performance throughout market cycles.
Performance for the Period
Against this backdrop, the Company's share price total return to shareholders
over the six-months to 30 June 2022 was 8.3 per cent. The share price at the
period-end was 111.4p, representing a discount of 25.0 per cent to the NAV per
share of 148.6p, and we have seen further share price volatility since the
period end. Despite positive developments in portfolio performance, and the use
of share buybacks, the share price discount remains frustrating. We will
continue to take actions which, we hope, will narrow the discount over time.
The NAV total return over the six months was 11.7 per cent. The following table
provides an analysis of the movement in the NAV per share for the period:
Pence
NAV per share as at 31 December 2021 135.1
Unrealised increase in valuation of direct property 11.9
portfolio
Share buybacks 1.6
Other net revenue 2.2
Movement in interest rate swap 0.1
Dividends paid (2.3)
NAV per share as at 30 June 2022 148.6
The total return from the underlying portfolio was 9.7 per cent, outperforming
the MSCI UK Quarterly Property Index ('MSCI' or 'Index') total return of 7.8
per cent. Capital growth was the key driver of returns at 7.5 per cent,
supported by an income return of 2.1 per cent, with both metrics posting
outperformance over the Index.
Capital growth has primarily been driven by our industrial and retail
warehousing assets, which have both benefitted from yield compression as a
diverse investor base has sought exposure to the attractive fundamentals that
characterise the sectors. Total return was supported by the conclusion of a
number of accretive asset management initiatives. Across the wider portfolio,
the period has been characterised by an uptick in occupational activity
delivering tangible rental growth, whilst capital and income growth through
asset management has underpinned wider outperformance.
The Managers' Report covers sector performance and asset management successes
in detail and further potential opportunities to extract growth from the
existing asset base.
Share Buybacks
The Company has continued share buybacks during the period, using some of the
proceeds from property sales in 2021. The Company purchased 33.2 million shares
during the six months at an average discount of 18 per cent and a cost of £37.8
million. This has enhanced the NAV by 1.6 pence per share during the period and
has provided additional liquidity in the Company's shares. Consideration will
be given to further buybacks if the Board believes that this course of action
continues to be in the best interests of all shareholders.
Cash and Borrowings
The Company had approximately £86 million of available cash at 30 June 2022 and
an undrawn revolving credit facility of £50 million. The long-term debt with L&
G does not need to be refinanced until December 2024, and we are currently in
the process of agreeing terms to extend the existing Barclays £50 million term
loan, and the £50 million revolving credit facility, by one year to 31 July
2024. As of 30 June 2022, the Company's loan to value, net of cash ('LTV') was
17.3 per cent and the Company complied with its financial covenants.
Dividends
In April 2022, the Company announced a 6.7 per cent increase to the monthly
dividend, raising the monthly distribution to 0.40 pence from 0.375 pence per
share.
The Company paid four interim dividends of 0.375 pence per share and two
interim dividends at the increased rate of 0.4 pence per share during the
period, totalling 2.3 pence per share. It has continued to pay monthly
dividends at the increased rate since the period end.
Environmental, Social and Governance (ESG)
The Managers and Board maintain a strong commitment to adopting high ESG
standards. Our continued progress is referenced later in this interim results
announcement whilst further insight into our performance will be provided in
our 2022 ESG Report due for publication in April 2023.
Company Name change
Further to the ownership changes of the Managers and as previously
communicated, it was no longer appropriate that the Company had BMO in its
name. After much consideration, the Board agreed that the Company name be
changed to Balanced Commercial Property Trust, to reflect the strategic
direction of the Company, and the change came into effect on 30 June 2022.
Outlook
The economy saw a strong rebound in 2021, but growth has slowed in the face of
rising inflation, persistent supply chain disruption and elevated geopolitical
risks. Inflation has reached double digits and forecasts for the inflationary
peak are mixed. Notwithstanding government fiscal support, households are
facing a significant squeeze on their finances. The implications for consumer
confidence and spending would be expected to feed into real estate's
occupational markets. The recent increases to interest rates and the market
expectation of further increases have raised the cost of finance and served to
slow investment activity.
In uncertain markets, stock selection and asset fundamentals come even more to
the fore. It is a difficult period for UK commercial real estate and your
Company's portfolio will not be immune from its own challenges. The Managers
are experienced in dealing with these challenges and believe there is
significant latent value yet to be extracted from the asset base. This includes
redevelopment and refurbishment projects, ESG-led investment across a number of
holdings, continued modernisation of the retail warehousing parks, and the
potential repurposing of assets within the office and retail sectors.
Paul Marcuse
Chairman
Performance Summary
Half year
ended 30 June
2022
Total Returns for the period *
Net asset value per share 11.7%
Ordinary Share price 8.3%
Portfolio 9.7%
MSCI UK Quarterly Property Index 7.8%
FTSE All-Share Index (4.6)%
Half year Year ended
ended 30 June 31 December
2022 2021 % change
Capital Values
Total assets less current liabilities (£'000) 1,380,776 1,328,577 3.9%
Net asset value per share 148.6p 135.1p 10.0%
Ordinary Share price 111.4p 105.0p 6.1%
EPRA Net Tangible Assets per share* 148.4p 135.1p 9.8%
FTSE All-Share Index 3,940.9 4,208.0 (6.3)%
Ordinary share price discount to net asset (25.0)% (22.3)%
value per share*
Net Gearing * 17.3% 14.4%
Half year Half year
ended 30 June ended 30
2022 June 2021
Earnings and Dividends
Earnings per Ordinary Share 14.4p 9.1p
Dividends per Ordinary Share 2.3p 2.1p
EPRA Earnings per Ordinary Share 2.3p 2.9p
Dividend yield * 4.1% 4.6%
Sources: Columbia Threadneedle Investment Business, MSCI Inc and Refinitiv
Eikon
* See Alternative Performance Measures
Managers' Review
Property Market Review
The last six months have seen a continuation of impressive performance from the
UK real estate market, which has generated a total return of 7.8 per cent over
the 6 months to June 2022. Capital growth of 5.8 per cent was the driving force
behind real estate's performance, with £35.1 billion invested into the UK real
estate market over the first six months of 2022 - a 17 per cent increase on the
equivalent period in 2021. Offices remained the most sought-after asset class
with robust demand for prime Central London the key driver of investment
volumes. The structural attractions of the industrial sector has continued to
drive investment volumes significantly ahead of long-term averages, as a
diverse investor base sought to build scale in the sector.
In recent months, mounting economic headwinds in the form of supply chain
disruption, substantial inflationary pressures combined with the associated
cost of living crisis and notable interest rate increases have begun to weigh
on wider market sentiment. Investment volumes will slow over the second half of
the year as pricing uncertainty cools the capital markets, leading to a
repricing of the market. However, any price rebasing is likely to have nuances
at both sector and asset level, with prime assets benefitting from a 'flight to
quality' on account of their occupational and pricing resilience.
This polarisation is already playing out most notably within the office sector,
which saw relatively muted total returns of 3.1 per cent over the period.
Occupier and investor demand for well located, high-quality offices with strong
ESG credentials has proven robust at the expense of lower-quality, secondary
stock. As the UK's 'return to office' has continued to evolve, occupancy rates
have improved although are still significantly behind pre-Covid levels as
corporate strategies on return to work remain in a state of relative flux.
The industrial sector has been supported over the past decade by the growth of
e-commerce, in turn spurring occupational demand across the sub-markets from
big-box logistics to last-mile delivery. While e-commerce has fallen to around
25 per cent of retail sales from the peak of 38 per cent seen in the middle of
the health crisis, the long-term trend is for steady growth in market share.
Consequently, investor demand (and therefore yield compression) has been
primarily driven by the sector's rental growth prospects. The first half of
2022 has seen occupational take up at near-record levels and at a significant
premium to long term averages, with vacancy rates in the UK standing at circa
3.0 per cent. This supported another period of strong performance, with the
sector delivering a total return of 13.3 per cent. A significant speculative
development pipeline, combined with mounting cost pressures, may yet dampen the
occupational market. However, the sector appears well-positioned to continue to
relatively outperform as supply-demand metrics remain favourable and tangible
rental growth a key feature of the market.
Confidence within the retail market strengthened over the period, with the
sector generating a total return of 7.6 per cent. However, while the
traditional high street sector has shown tentative signs of recovery in the
form of rental growth and yield compression, it is the retail warehousing
sub-sector that has driven returns. Retail warehousing has benefitted from
structural changes to the retail market, proving invaluable as part of an
omni-channel retailing platform, while the prevalence of 'essential' retailers
underpinned the resilience of the sector through the Covid pandemic. A weight
of capital has spurred rapid yield compression across the retail warehousing
sub-markets. Consequently, capital growth was the mainstay of the sector's
exceptional total return of 14.0 per cent over the six-month period. The
sustainable income profiles, relative yield advantage and inherent flexibility
of the underlying real estate should continue to support the sector. However,
rental growth and yields are likely to come under pressure as consumer incomes
and operator margins are squeezed ever tighter and the capital markets react to
increasing interest rates.
The 'alternative' markets delivered a total return of 4.5 per cent over the
period. There remains a significant weight of capital seeking exposure to the
alternatives market due to the attractive long-term inflation-hedging income
profiles that characterise the sector, alongside strong demographic drivers
that support many of the underlying sub-sectors. Hotels, student accommodation
and residential sectors remain the driver of investment volumes, although
quality investment opportunities remain relatively scarce, particularly in the
absence of significant development funding. Going forwards, the sector is
generally considered counter-cyclical and is expected to be a key contributor
to performance in coming periods.
Valuation and Portfolio
The six-month total return from the portfolio was 9.7 per cent compared with
the MSCI return of 7.8 per cent. Capital growth of 7.5 per cent was the primary
driver of returns, supported by a robust income return of 2.1 per cent, with
both metrics generating outperformance against the Index.
The Company's industrial assets remain the bedrock of performance, now
accounting for 33.7 per cent of the portfolio by capital value and delivering a
total return of 18.0 per cent over the period, outperforming the Index return
of 13.3 per cent. Returns from the industrial assets have been driven by
capital growth of 16.4 per cent as the sector has benefitted from sustained
yield compression.
The portfolio's retail warehousing assets have been the stand-out performers
over the period, generating a total return of 25.0 per cent. Returns were
driven by capital growth of 21.9 per cent and delivered significant
outperformance against the Index return of 14.0 per cent. The Company's retail
warehousing parks at Sears Retail Park, Solihull and Newbury Retail Park saw
excellent progress against business plans as a number of accretive asset
management initiatives have progressed over the period. Successful asset-level
outcomes have been supported by market yield compression.
The wider retail sector, delivered a total return of 9.0 per cent over the
period, outperforming the Index return of 7.6 per cent. Notably, the
portfolio's largest asset - the retail holding at St Christopher's Place
generated an accretive total return over the period, delivering two consecutive
quarters of capital growth. The first positive valuation movements seen since
the onset of the pandemic come as the asset has benefitted from the recovery in
tourism and footfall in London's West End.
The portfolio's office holdings have seen a more muted performance, delivering
a total return of 2.2 per cent over the period and the only sector to
underperform against the Index return of 3.1 per cent. This is due to sentiment
on shorter leases and the large lease event at Stockley Park, Uxbridge.
Occupational activity across the portfolio over the period has underlined
continued tenant demand for the Company's prime asset base. Additionally,
strong residual values attached to the Company's core geographic exposures has
enabled us to progress a number of highly accretive refurbishment and
repurposing strategies.
Geographical Analysis (% of total property portfolio)
30 June 2022
(%)
Midlands 24.4
South East 23.9
London - West End 23.6
North West 13.7
Scotland 10.5
South West 2.4
Rest of London 1.5
Source: Columbia Threadneedle REP AM
Sector Analysis (% of total property portfolio)
30 June 2022
(%)
Industrial 33.7
Offices 29.6
Retail 14.5
Retail Warehouses 12.3
Alternative 9.9
Source: Columbia Threadneedle REP AM
Income Analysis and Voids
Over the period, the portfolio vacancy rate has increased from 2.0 per cent to
6.5 per cent, excluding assets under development.
The increased vacancy is primarily as a result of the 92,000 sq ft office
holding at Stockley Park, Uxbridge, where the tenant was known to be vacating
in March 2022. Given its strategic West London location, the site holds
significant residual value and an appraisal of redevelopment options for
higher-value alternative uses is underway, alongside negotiations with
prospective operators.
The retail warehousing assets in Solihull and Newbury account for the majority
of the residual vacancy, although at the time of writing all vacant space on
both parks is either under offer or subject to agreement for lease.
The underlying quality of the portfolio is borne out in robust rent collection
statistics, with collection over the 6 months standing at 99.0 per cent.
The Company's income return has been supported by exposure to fixed uplifts or
inflation-linked indexation, with approximately 21 per cent of the Company's
income profile linked to partial inflationary uplifts through rent review
mechanisms.
Lease Expiry Profile
At 30 June 2022 the weighted average lease length for the portfolio, assuming
all break options are exercised, was 5.1 years.
% of leases expiring (weighted by rental 30 June 2022 31 December 2021
value) (%) (%)
0 - 5 years 56.6 56.0
5 - 10 years 27.8 29.3
10 - 15 years 10.4 9.8
15 - 25 years 5.2 4.9
Source: Columbia Threadneedle REP AM
Industrial & Logistics
Over the period, strong asset-level outcomes have underpinned significant
outperformance from the Company's industrial assets as a number of asset
management initiatives have been successfully progressed and delivered.
Hams Hall Distribution Park, Birmingham
A 226,000 sq ft prime distribution facility was subject to outstanding rent
review as at July 2021. The review has now been settled at a rent representing
an uplift of 9 per cent against the previous passing rent.
The Cowdray Centre, Colchester
The asset is subject to a phased repositioning strategy centred around the
development of a new multi-unit trade counter scheme. Redevelopment has
progressed as demolition of obsolete warehousing has begun and planning
submitted for the upgraded scheme.
Elsewhere on the estate, the refurbishment of three existing units completed,
two of which are now under offer at record headline rents for the scheme.
Investment into the asset has spurred occupational activity, in turn
translating into a meaningful uplift in rental values.
Quintus Business Park, Burton-upon-Trent
The pre-let development funding of this highly specified logistics unit reached
practical completion in August 2022. The asset benefits from strong
environmental credentials with an A-rated EPC and BREEAM Excellent
accreditation. Following completion of the £21.5m scheme, the unit will be
occupied on an attractive 15 year index-linked lease.
Hurricane 52, Estuary Business Park, Liverpool
The speculative development of this 52,000 sq ft unit has progressed well, with
practical completion targeted for Q4 2022. The £4.5m development, delivered as
a forward commitment to purchase, is adjacent to existing holdings and is
situated in an area with limited supply and good occupier demand.
Retail and Retail Warehouse
One of the core drivers of recent investor demand for retail warehousing has
been the relative yield premium over the industrial sector. The ability to
maintain and enhance income profiles is therefore a key determinant of asset
performance.
Over the period, successful asset management has again generated strong
asset-level outcomes supporting both income and capital returns.
Newbury Retail Park, Pinchington Lane, Newbury
Strong levels of occupational activity on Newbury Retail Park have made it the
Company's best performing asset over the period.
The drive-thru market has continued to demonstrate resilience, with an
expansionary occupier pool driving rental growth. Tim Hortons have exchanged a
15-year lease on the former Pizza Hut unit, where the tenant entering into CVA
allowed us to pursue a higher value alternative for the unit. The new lease is
subject to planning consent for a drive-thru conversion.
Activity on the park has not been restricted to the Food & Beverage ('F&B')
sector, as Currys have also entered into a new 10 year lease on their unit and
3 further retail units are under offer to major national multiple retailers. We
hope to be able to report further positive progress in due course.
Sears Retail Park and Oakenshaw Road, Solihull
At the start of the period, Sears Retail Park and the adjacent holding on
Oakenshaw Road were subject to two vacancies, both of which have been
successfully relet in the period, securing attractive lease terms to
well-established occupiers.
The 10,000 sq ft former Argos store has been re-let to Mountain Warehouse on a
new 10 year lease. The lease is subject to landlord works including an upgrade
to the store's façade, undertaken as part of a phased modernisation of the
units.
The 7,750 sq ft former Multiyork unit has also been relet, with Pure Gym taking
a new 15 year lease.
St. Christopher's Place
The Central London retail market has faced unprecedented challenges as
structural change within the wider retail market was compounded by the onset of
the Covid pandemic. However, the Company's largest asset has seen an
encouraging start to the year, delivering its first valuation uplifts since
December 2018.
The asset has benefitted from the continued recovery in footfall and St
Christopher's Place has outperformed the wider West End and UK national
footfall statistics. Footfall across the estate is 10 per cent up on a
like-for-like basis against 2019. These encouraging statistics have been
supported by the notable return of international tourists, domestic tourists
and office workers, despite the prevalence of hybrid working patterns reducing
office presence within the West End.
In this context, the period has seen a marked increase in occupational activity
at St Christopher's Place, resulting in a significant uplift in both rental
values and contracted rent. Key initiatives delivered over the period include:
* The development of a revised leasing strategy to enhance the Food &
Beverage ('F&B') offering at St Christopher's Place. This has already begun
to yield positive outcomes as terms have been agreed to bring a number of
new F&B operators to the estate
* Three lease renewals have completed with F&B tenants; the Lamb & Flag pub
and restaurants Olivelli and Sofra
* Love Brand have opened their new resort wear store at 20-21 St
Christopher's Place
* Refurbishment works have completed across a number of office suites,
delivering well-specified accommodation. Over the period, four new office
leases have completed and a further two new lettings are under offer at the
time of writing
* Multiple successful pop-up lettings completed during the period including
to electric motorcycle showroom Meaving, and jeweller Bijoux de Mimi
Offices
In the context of polarisation within the wider office market, the Company's
portfolio is well positioned given its prime holdings in core locations,
occupied by a high-quality tenant base. Not only does the Company's conviction
to core locations support tenant demand, it also underpins our ability to make
accretive investment into the standing portfolio to deliver long-term
performance through refurbishment and asset repurposing, leveraging strong
underlying residual values.
17a Curzon Street, London
This prime, multi-let holding in London's Mayfair has become fully occupied
over the period following the letting of the remaining first floor on a new 5
year lease to 65 Equity Partners. Lease regear discussions are underway across
half of the asset's suites, while a phased refurbishment of the asset is also
underway, driving an improved rental tone across the holding while also
upgrading ESG credentials.
2-4 King Street, London
Lease events are providing opportunity to drive meaningful rental increases,
boosting both capital and income returns from the asset. The period has seen
the completion of a lease extension with David Gill Gallery, extending the
unexpired term by a further 10 years and securing a 9 per cent uplift in the
passing rent. Terms have been agreed elsewhere in the building for a lease
renewal at a 15 per cent rental uplift.
82 King Street, Manchester
NM Rothschild have completed a 10 year reversionary lease at a rent showing a
10 per cent uplift on the previous passing rent, while terms have been agreed
with two other occupiers for new leases elsewhere in the building. A number of
major ESG-led initiatives are also underway at the holding.
Alhambra House, Glasgow
Alhambra House in Glasgow is subject to an ongoing repositioning and
refurbishment strategy which is expected to prove a highly productive use of
capital. The period has seen significant progress made on the planning
submission, which will be the catalyst for the project.
The Alternative Property Sector
The Company's exposure to the sector stands at 9.9 per cent by capital value.
The sector has also been identified as a key area for further investment given
its attractive fundamentals and favourable performance outlook.
The student housing asset at Burma Road, Winchester is the Company's largest
individual holding within the alternative sector. The asset has a highly
attractive leasing structure, with an unexpired term of approximately 16 years
with annual inflation-linked rent reviews. During the period, the tenant has
made significant investment in installing air source heat pumps and solar
panels throughout the estate. Not only does this underline the tenant's
long-term commitment to the asset, it also results in a significant improvement
to the asset's ESG credentials.
The Company's alternative holdings also include a significant residential
exposure at St Christopher's Place, London, accounting for nearly 25 per cent
of the capital value of the asset. Both occupancy rates and rental values for
the residential units have now returned to pre-pandemic levels, generating a
meaningful positive effect on the asset's income return and valuation.
Transactional and investment activity
Significant investment was made in December 2021 with the acquisition of two
regional industrial assets totalling £66m. These acquisitions have proven
highly productive, both featuring in the portfolio's top 10 performers since
the turn of the year. However, no further acquisitions have been made during
the during the period as relative pricing throughout H1 2022 has made
investment for long-term performance increasingly challenging.
Recently we have seen a marked shift in sentiment, as economic headwinds have
led to a cooling in investment activity and consequent pricing uncertainty.
While this presents challenges in the deployment of capital, we are continuing
to appraise investments within identified growth areas as current market
conditions will no doubt give rise to opportunity to exploit mis-pricing.
The period has also seen meaningful investment made into the Company's standing
portfolio, which offers opportunity to extract additional growth from the
existing asset base. As outlined above, a number of exciting capital
expenditure projects are underway, leveraging high residual values to deliver
positive returns from Company resources and long-term performance from the
asset base, most notably including:
* ESG-led investment across a number of office holdings, future-proofing the
asset base
* Modernisation of the retail warehousing parks, generating positive leasing
momentum
* Potential repurposing of assets within the office and retail sectors to
deliver higher value alternative uses
* Redevelopment and refurbishment projects across the industrial and office
portfolios as well as at St Christopher's Place, driving both rental and
capital growth from standing assets
Outlook
The UK real estate market had a solid first six months of 2022. However, the
economic context is increasingly challenging as geopolitical tension, continued
supply chain disruption and significant inflationary pressures weigh on the UK
economy and its consumers. Interest rate increases and the outlook for further
increases is impacting the cost of finance and many debt backed purchasers have
stepped back from the market. This is having an impact on asset pricing in the
sectors where these purchases were motivated and active over the first half of
the year. The second half of the year will naturally see investors exercising
caution.
While economic pressures may yet precipitate a UK recession, a lower-growth
environment is inevitable. The likelihood is that investment yields will see a
softening, rather than slowdown in the occupational markets, although rental
levels are likely to remain benign. The coming months will be focused on price
discovery amid a pause in investment activity.
Through periods of uncertainty investors will look to drive income. However,
the rising cost of capital and increasing gilt yields mean that yields in some
sectors of the market are increasingly hard to justify at their current levels.
Industrial - where yields reached historic lows over the period - has already
been subject to a marginal adjustment with more expected to follow. The wider
market will likely come under the same pressures, albeit relative yield
premiums in the other sectors will offer some protection.
In challenging market conditions, asset fundamentals come to the fore. The
Company's conviction to high quality real estate in enduring prime locations
positions the portfolio to perform through the market cycles as robust capital
values alongside a yield premium will protect long-term returns. Alongside
asset management to extract value from the standing portfolio, there is
significant opportunity to further boost returns through the delivery of
capital expenditure initiatives.
Richard Kirby and Dan Walsgrove
CT Real Estate Partners
September 2022
Environmental, Social and Governance (ESG)
Highlights for the six-month period to 30 June 2022
As a Board, we continue to give considerable attention to our ESG commitments
and tangible support to our Property Manager in responding proactively to this
important requirement. Our establishment of a formal ESG Committee, chaired by
a nominated director, at the beginning of the year is a clear signal of our
intent to fully consider and address critical factors in a systematic and
methodical manner to ensure that momentum is maintained, and delivery is
achieved.
The emergence of challenging economic and geopolitical conditions, particularly
around energy security and volatility in pricing, serves as a reminder of the
benefits of pursing net zero carbon ambitions and focussing on energy
efficiency and exploiting renewables opportunities. Our programme of
undertaking detailed carbon assessments at an individual property level is well
underway despite the capacity issues we see within the market around the
provision of such skilled services. We are confident that we will have
assimilated sufficient information by the year end in order to further refine
our portfolio strategy and develop a costed pathway.
In the meantime, we have continued to pursue our regular core activities:
* The Company submitted to the 2022 GRESB (Global Real Estate Sustainability
Benchmark) survey on schedule for both real estate and public disclosure
modules. Results are due to be published on 1st October.
* The Company also submitted to the full tier of the CDP climate change
module on schedule, with these results due to published by the end of the
year.
* For its 2021 ESG Report, and for the fourth year in succession, the Company
achieved a Gold Award for alignment to the 3rd Edition of the EPRA
Sustainability Best Practice Recommendations.
* Whilst retaining some reservations around the possibility of some ongoing
distortion to consumption patterns in a post pandemic environment, compared
to the six-month period to 30 June 2021, the Company has seen:
2.5% like-for-like increase in energy consumption #
9.6% reduction in absolute energy consumption
2.7% like-for-like reduction in carbon emissions #
13.9% absolute reduction in carbon emissions
14.1% reduction in energy intensity
The reductions in absolute energy consumption are principally on account of two
assets, at Solihull and Wimbledon, whilst the reductions in carbon can be
attributed in part to the ongoing decarbonisation of the electricity network as
well as these lower consumptions at asset level.
* Determined by the number of directly managed assets, 100 per cent of sites
within the portfolio are paying the real living wage to all service
provider employees within scope in line with our target ambition of 100 per
cent by the end of 2021.
* The distribution profile of Energy Performance Certificate (EPC) ratings is
marginally improved across the portfolio taking certificate expiry and
renewal into account, ratings being in place for 100 per cent of demises.
Exposure to lower F&G rated assets is minimal at 15 demises representing
7.1% and 4.7% by Estimated Rental Value and Net Lettable Area respectively
whilst exposure to higher A&B rated assets covers 62 demises being 38.7% by
Estimated Rental Value and 40.0% by Net Lettable Area.
* The Company continues to monitor its tenant mix as part of its commitment
to minimising leasing exposure to organisations connected to the
production, storage, distribution or use of Controversial Weapons*. At the
period ending 30 June 2022 zero per cent of rental income was attributable
to organisations that appear on the exclusion lists managed by Columbia
Threadneedle Global Asset Management.
# Like-for-like: consumption values at an asset level are included into
like-for-like change calculations if data availability is for two consecutive
years.
* Including cluster munitions, anti-personnel mines and biochemical weapons as
covered by the 1972 Biological and Toxic Weapons Convention, the 1997 Chemical
Weapons Convention, the 1999 Anti-Personnel Mine Ban Convention, and the 2008
Convention on Cluster Munitions.
Balanced Commercial Property Trust Limited
Condensed Consolidated Statement of Comprehensive Income (unaudited)
for the six months to 30 June 2022
Notes Six months Six months Year to
to 30 June to 30 June 31 December
2022 2021 2021*
£'000 £'000 £'000
Revenue
Rental income 29,432 32,415 55,843
Other income 42 3,008 3,008
Total revenue 29,474 35,423 58,851
Gains / (losses) on investment properties
Unrealised gains on revaluation of investment 5 89,314 47,981 86,976
properties
(Losses)/gains on sale of investment properties 5 (5) 1,353 34,397
realised
Total income 118,783 84,757 180,224
Expenditure
Investment management fee (3,535) (3,411) (7,195)
Other expenses 3 (3,297) (2,260) (4,540)
Total expenditure (6,832) (5,671) (11,735)
Operating profit before finance costs and taxation 111,951 79,086 168,489
Net finance costs
Interest receivable 44 1 1
Finance costs (5,642) (5,638) (11,140)
(5,598) (5,637) (11,139)
Profit before taxation 106,353 73,449 157,350
Taxation (345) (656) (1,327)
Profit for the period 106,008 72,793 156,023
Other comprehensive income
Items that are or may be reclassified subsequently
to profit
or loss
Movement in fair value of effective interest rate 733 237 544
swap
Total comprehensive income for the period 106,741 73,030 156,567
Basic and diluted earnings per share 4 14.4p 9.1p 19.8p
All of the profit and total comprehensive income for the period is attributable
to the owners of the Group.
All items in the above statement derive from continuing operations.
* These figures are audited.
Balanced Commercial Property Trust Limited
Condensed Consolidated Balance Sheet (unaudited)
as at 30 June 2022
Notes 30 June 30 June 31 Dec
2022 2021 2021*
£'000 £'000 £'000
Non-current assets
Investment properties 5 1,281,289 1,234,898 1,180,486
Trade and other receivables 19,857 24,540 19,319
Interest rate swap asset 1,199 - 466
1,302,345 1,259,438 1,200,271
Current assets
Trade and other receivables 8,784 11,096 8,698
Taxation receivable 73 134 134
Cash and cash equivalents 86,412 56,187 138,081
95,269 67,417 146,913
Total assets 1,397,614 1,326,855 1,347,184
Current liabilities
Trade and other payables (16,679) (25,709) (18,448)
Interest rate swap liability (159) - (159)
(16,838) (25,709) (18,607)
Non-current liabilities
Trade and other payables (2,167) (2,098) (2,416)
Interest-bearing loans (309,047) (308,614) (308,641)
(311,214) (310,712) (311,057)
Total liabilities (328,052) (336,421) (329,664)
Net assets 1,069,562 990,434 1,017,520
Represented by:
Share capital 6 7,199 7,934 7,531
Special reserves 507,416 584,193 544,813
Capital reserves 439,575 278,227 350,266
Hedging reserve 1,040 - 307
Revenue reserve 114,332 120,080 114,603
Equity shareholders' funds 1,069,562 990,434 1,017,520
Net asset value per share 7 148.6p 124.8p 135.1p
* These figures are audited.
Balanced Commercial Property Trust Limited
Condensed Consolidated Statement of Changes in Equity (unaudited)
for the six months to 30 June 2022
Share Special Capital Hedging Revenue
Capital Reserves Reserves Reserve Reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
Notes
At 1 January 7,531 544,813 350,266 307 114,603 1,017,520
2022
Total
comprehensive
income for the
period
Profit for the - - - - 106,008 106,008
period
Movement in fair
value of
interest rate - - - 733 - 733
swap
Losses on sale
of investment
properties 5 - - (5) - 5 -
realised
Transfer in
respect of
unrealised gains
on investment 5 - - 89,314 - (89,314) -
properties
Total
comprehensive
income for the
period - - 89,309 733 16,699 106,741
Transactions
with owners of
the Company
recognised
directly in
equity
Shares held in
Treasury 6 (332) (37,397) - - - (37,729)
Dividends paid 2 - - - - (16,970) (16,970)
At 30 June 2022 7,199 507,416 439,575 1,040 114,332 1,069,562
Balanced Commercial Property Trust Limited
Condensed Consolidated Statement of Changes in Equity (unaudited)
for the six months to 30 June 2021
Share Special Capital Hedging Revenue
Capital Reserves Reserves Reserve Reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
Notes
At 1 January 7,994 589,593 228,893 (237) 113,401 939,644
2021
Total
comprehensive
income for the
period
Profit for the - - - - 72,793 72,793
period
Movement in fair
value of
interest rate - - - 237 - 237
swap
Gains on sale of
investment
properties 5 - - 1,353 - (1,353) -
realised
Transfer in
respect of
unrealised gains
on investment 5 - - 47,981 - (47,981) -
properties
Total
comprehensive
income for the
period - - 49,334 237 23,459 73,030
Transactions
with owners of
the Company
recognised
directly in
equity
Shares held in
Treasury 6 (60) (5,400) - - - (5,460)
Dividends paid 2 - - - - (16,780) (16,780)
At 30 June 2021 7,934 584,193 278,227 - 120,080 990,434
Balanced Commercial Property Trust Limited
Condensed Consolidated Statement of Changes in Equity
for the year to 31 December 2021*
Share Special Capital Hedging Revenue
Capital Reserves Reserves Reserve Reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
Notes
At 1 January 2021 7,994 589,593 228,893 (237) 113,401 939,644
Total
comprehensive
income for the
year
Profit for the - - - - 156,023 156,023
year
Movement in fair
value of interest - - - 544 - 544
rate swaps
Transfer in
respect of
unrealised gains 5 - - 86,976 - (86,976) -
on investment
properties
Gains on sale of
investment
properties 5 - - 34,397 - (34,397) -
realised
Total
comprehensive - - 121,373 544 34,650 156,567
income for the
year
Transactions with
owners of the
Company recognised
directly in equity
Shares held in 6 (463) (44,780) - - - (45,243)
treasury
2 - - - - (33,448) (33,448)
Dividends paid
At 31 December 7,531 544,813 350,266 307 114,603 1,017,520
2021
* These figures are audited.
Balanced Commercial Property Trust Limited
Condensed Consolidated Statement of Cash Flows (unaudited)
for the six months to 30 June 2022
Six months Six months Year to
to 30 June to 30 June 31 December
Notes 2022 2021 2021*
£'000 £'000 £'000
Cash flows from operating activities
Profit for the period before taxation 106,353 73,449 157,350
Adjustments for:
Finance costs 5,642 5,638 11,140
Interest receivable (44) (1) (1)
Unrealised gains on revaluation of investment 5 (89,314) (47,981) (86,976)
properties
Losses/(gains) on sale of investment properties 5 (1,353) (34,397)
realised
(Increase)/decrease in operating trade and other (563) (3,454) 4,165
receivables
(Decrease)/increase in operating trade and other (966) 3,486 (4,761)
payables
Cash generated from operations 21,113 29,784 46,520
Interest received 44 1 1
Interest and bank fees paid (5,708) (5,567) (10,063)
Taxation paid (345) (656) (1,327)
(6,009) (6,222) (11,389)
Net cash inflow from operating activities 15,104 23,562 35,131
Cash flows from investing activities
Purchase of investment properties 5 - - (50,821)
Sale of investment properties 5 - 21,421 201,920
Capital expenditure of investment properties 5 (12,074) (1,452) (4,050)
Net cash (outflow) / inflow from investing (12,074) 19,969 147,049
activities
Cash flows from financing activities
Dividends paid 2 (16,970) (16,780) (33,448)
Issue costs from Barclays £100m loan facility - - (304)
extension
Shares held in Treasury 6 (37,729) (5,460) (45,243)
Net cash outflow from financing activities (54,699) (22,240) (78,995)
Net (decrease) / increase in cash and cash (51,669) 21,291 103,185
equivalents
Opening cash and cash equivalents 138,081 34,896 34,896
Closing cash and cash equivalents 86,412 56,187 138,081
* These figures are audited
Balanced Commercial Property Trust Limited
Notes to the Consolidated Accounts
for the six months to 30 June 2022
1 General information and basis of preparation
The condensed consolidated financial statements have been prepared in
accordance with the Disclosure Guidance and Transparency Rules of the United
Kingdom Financial Conduct Authority and IAS 34 'Interim Financial Reporting' as
adopted by the EU. The condensed consolidated financial statements do not
include all of the information required for a complete set of IFRS financial
statements and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2021, which were
prepared under full IFRS as adopted by the European Union requirements and The
Companies Law (Guernsey), 2008. The accounting policies used in the preparation
of the condensed consolidated financial statements are consistent with those of
the consolidated financial statements of the Group for the year ended 31
December 2021. These condensed interim accounts have not been audited. The
Group's entry to UK REIT Regime was effective from 3 June 2019. The Group's
rental profits arising from both income and capital gains are exempt from UK
corporation tax from that date, subject to the Group's continuing compliance
with the UK REIT rules.
After making enquiries and bearing in mind the nature of the
Company's business and assets, the Directors consider that the Company has
adequate resources to continue in operational existence for the next twelve
months. In assessing the going concern basis of accounting the Directors have
had regard to the guidance issued by the Financial Reporting Council. They have
considered the current cash position of the Group, forecast rental income and
other forecast cash flows. The Group has agreements relating to its borrowing
facilities with which it has complied during the period. Based on the
information the Directors believe that the Group has the ability to meet its
financial obligations as they fall due for the foreseeable future, which is
considered to be for a period of at least twelve months from the date of
approval of the financial statements. For this reason, they continue to adopt
the going concern basis in preparing the accounts.
These condensed interim financial statements were approved for
issue on 20 September 2022.
2. Dividends and property income distributions (PID) gross of income
tax
Six months Six months Six months Six months Year to 31 Year to 31
to 30 June to 30 June to 30 June to 30 June December December
2022 2022 2021 2021 2021 2021
PID Rate PID Rate PID Rate
(pence) £'000 (pence) £'000 (pence) £'000
In respect of
the previous
period:
Ninth interim 0.375 2,816 0.35 2,798 0.35 2,798
Tenth interim 0.375 2,803 0.35 2,798 0.35 2,798
Eleventh 0.375 2,773 0.35 2,798 0.35 2,798
interim
Twelfth interim 0.375 2,758 0.35 2,798 0.35 2,798
In respect of
the period
under review:
First interim 0.40 2,920 0.35 2,798 0.35 2,798
Second interim 0.40 2,900 0.35 2,790 0.35 2,790
Third interim - - - - 0.35 2,771
Fourth interim - - - - 0.35 2,750
Fifth interim - - - - 0.35 2,736
Sixth interim - - - - 0.35 2,705
Seventh interim - - - - 0.375 2,867
Eighth interim - - - - 0.375 2,839
2.30 16,970 2.10 16,780 4.25 33,448
Property Income Distributions paid/announced subsequent to the period end were:
Record date Payment date Rate (pence)
Third interim dividend 15 July 2022 29 July 2022 0.40
Fourth interim dividend 12 August 2022 31 August 2022 0.40
Fifth interim dividend 16 September 2022 30 September 2022 0.40
Although these payments relate to the period ended 30 June 2022, under IFRS
they will be accounted for in the period during which they are declared.
3. Other expenses
Six months Six months Year to 31
to 30 June to 30 June December 2021
2022 2021
£'000 £'000 £'000
Direct operating expenses of rental 2,935 1,566 3,996
property
Credit loss provision* (505) (56) (1,103)
Valuation and other professional fees 252 245 442
Directors' fees 145 143 268
Administration fee 80 78 159
Depositary fee 78 70 142
Other 312 214 636
3,297 2,260 4,540
* The credit loss provision is rent and service charge receivable that was
greater than three months overdue.
The basis of payment for the Directors' and investment management fees are
detailed within the consolidated financial statements of the Group for the year
ended 31 December 2021.
4. Earnings per share
Six months Six months Year to 31
to 30 June to 30 June December 2021
2022 2021
Net profit attributable to ordinary
shareholders (£'000) 106,008 72,793 156,023
Earnings return per share - pence 14.4p 9.1p 19.8p
Weighted average of ordinary shares in
issue during the period 737,305,791 798,723,703 786,825,807
Earnings for the six months to 30 June 2022 should not be taken as guide to the
results for the year to 31 December 2022.
5. Investment properties
Six months Six months Year to 31
to 30 June to 30 June December
2022 2021 2021
Non-current assets - Investment properties £'000 £'000 £'000
Freehold and leasehold properties
Opening fair value 1,180,486 1,205,293 1,205,293
Sales - proceeds - (21,421) (201,920)
- (loss) / gains on sale (5) (2,308) 91,730
Capital expenditure 11,429 1,692 4,050
Purchase of investment properties 65 - 51,690
Unrealised gains / (losses) realised during - 3,661 (57,333)
the period
Unrealised gains on investment properties 91,006 59,865 120,722
Unrealised losses on investment properties (1,692) (11,884) (33,746)
Closing fair value 1,281,289 1,234,898 1,180,486
Historic cost at the end of the period 916,724 937,643 905,230
Six months Six months Year to 31
to 30 June to 30 June December
2022 2021 2021
£'000 £'000 £'000
(Losses) / gains on sale (5) (2,308) 91,730
Unrealised gains / (losses) realised during - 3,661 (57,333)
the period
(Losses) / gains on sales of investment (5) 1,353 34,397
properties realised
The fair value of investment properties reconciled to the appraised value as
follows:
Six months Six months Year to 31
to 30 June to 30 June December
2022 2021 2021
£'000 £'000 £'000
Appraised value prepared by CBRE 1,302,560 1,261,550 1,200,842
Lease incentives held as debtors (21,271) (26,652) (20,356)
Closing fair value 1,281,289 1,234,898 1,180,486
All the Group's investment properties were valued as at 30 June 2022 by RICS
Registered Valuers working for CBRE Limited ('CBRE'), commercial real estate
advisors, acting in the capacity of a valuation adviser to the AIFM. All such
valuers are Chartered Surveyors, being members of the Royal Institution of
Chartered Surveyors ('RICS').
CBRE completed the valuation of the Group's investment properties at 30 June
2022 on a fair value basis and in accordance with The RICS Valuation - Global
Standards (incorporating the International Valuation Standards) and UK national
supplement ("the Red Book") current as at the valuation date.
There were no significant changes to the valuation process, assumptions and
techniques used during the period, further details on which were included in
note 9 of the consolidated financial statements of the Group for the year ended
31 December 2021.
As at 30 June 2022, all of the Group's properties are Level 3 in the fair value
hierarchy as it involves the use of significant unobservable inputs and there
were no transfers between levels during the period. Level 3 inputs used in
valuing the properties are those which are unobservable, as opposed to Level 1
(inputs from quoted prices) and Level 2 (observable inputs either directly i.e.
as priced, or indirectly, i.e. derived from prices).
6. Share capital
Six months Six months Six months Six months Year to 31 Year to 31
to 30 June to 30 June to 30 June to 30 June December December
2022 2022 2021 2021 2021 2021
No. of No. of No. of
shares £'000 shares £'000 shares £'000
Allotted,
called-up and
fully paid
Opening Ordinary
shares of 1p 753,105,830 7,531 799,366,108 7,994 799,366,108 7,994
each
Held in treasury (33,219,905) (332) (6,000,000) (60) (46,260,278) (463)
Closing Ordinary
shares of 1p each 719,885,925 7,199 793,366,108 7,934 753,105,830 7,531
Under the Company's Articles of Incorporation, the Company may issue an
unlimited number of Ordinary Shares. The Company issued nil Ordinary Shares
during the period (2021: nil) raising net proceeds of £nil (2021: £nil).
The Company purchased 33,219,905 (30 June 2021: 6,000,000; 31 December 2021:
46,260,278) Ordinary Shares during the period which are held in treasury.
7. Net asset value per share
Six months Six months Year to 31
to 30 June to 30 June December 2021
2022 2021
Net asset value per ordinary share - pence 148.6p 124.8p 135.1p
Net assets attributable at the period end 1,069,562 990,434 1,017,520
(£'000)
Number of ordinary shares in issue at the 719,885,925 793,366,108 753,105,830
period end
8. Related party transactions
The Directors of the Company received fees for their services and dividends
from their shareholdings in the Company. No fees remained payable at the period
end.
9. Capital commitments
The Group had capital commitments totalling £18,900,000 as at 30 June 2022 (30
June 2021: £nil; 31 December 2021: £15,395,000).
10. List of Subsidiaries
The Group results consolidate the results of the following
companies:
- FCPT Holdings Limited (the parent company of F&C Commercial
Property Holdings Limited and Winchester Burma Limited)
- F&C Commercial Property Holdings Limited (a company which invests
in properties)
- SCP Estate Holdings Limited (the parent company of SCP Estate
Limited and Prime Four Limited)
- SCP Estate Limited (a company which invests in properties)
- Prime Four Limited (a company which invests in properties)
- Winchester Burma Limited (a company which invests in properties)
- Leonardo Crawley Limited (a company which invests in properties)
All of the above-named companies are registered in Guernsey.
The Group's ultimate parent company is Balanced Commercial Property Trust
Limited.
11. Forward looking statements
Certain statements in this report are forward looking statements. By their
nature, forward looking statements involve a number of risks, uncertainties or
assumptions that could cause actual results or events to differ materially from
those expressed or implied by those statements. Forward looking statements
regarding past trends or activities should not be taken as representation that
such trends or activities will continue in the future. Accordingly, undue
reliance should not be placed on forward looking statements.
Statement of Principal Risks and Uncertainties
The Company's assets comprise mainly of direct investments in UK commercial
property. Its principal risks are therefore related to the commercial property
market in general, particularly any permanent structural changes in the retail
and office markets. Other risks faced by the Company include market,
geopolitical, investment and strategic, regulatory, environmental, taxation,
management and control, operational, and financial risks. The Company is also
exposed to risks in relation to its financial instruments. These risks, and the
way in which they are managed, are described in more detail under the heading
'Principal Risks and Risk Management' within the Business Model and Strategy in
the Company's Annual Report for the year ended 31 December 2021. The Company's
principal risks have not changed since the date of that report and are not
expected to change for the remainder of the Company's financial year.
Statement of Directors' Responsibilities in Respect of the Interim Report
We confirm that to the best of our knowledge:
. the condensed set of unaudited consolidated financial statements
has been prepared in accordance with IAS 34 'Interim Financial Reporting' as
contained in UK adopted IFRS;
. the Chairman's Statement and Managers' Review (together
constituting the Interim Management Report) together with the Statement of
Principal Risks and Uncertainties above include a fair review of the
information required by the Disclosure and Transparency Rules ('DTR') 4.2.7R,
being an indication of important events that have occurred during the first six
months of the financial year and their impact on the condensed set of
consolidated financial statements; and
. the Chairman's Statement together with the condensed set of
unaudited consolidated financial statements include a fair review of the
information required by DTR 4.2.8R, being related party transactions that have
taken place in the first six months of the current financial year and that have
materially affected the financial position or performance of the Company during
that period, and any changes in the related party transactions described in the
last Annual Report that could do so.
On behalf of the Board
Paul Marcuse
Director
Alternative Performance Measures
The Company uses the following Alternative Performance Measures ('APMs'). APMs
do not have a standard meaning prescribed by GAAP and therefore may not be
comparable to similar measures presented by other entities. Further details of
the APMs methodology are available in the Company's Annual Report for the year
ended 31 December 2021.
Discount or Premium - the share price of an Investment Company is derived from
buyers and sellers trading their shares on the stock market. If the share price
is lower than the NAV per share, the shares are trading at a discount. This
usually indicates that there are more sellers than buyers. Shares trading at a
price above the NAV per share, are said to be at a premium.
Dividend Cover - The percentage by which Profits for the period (less gains/
losses on investment properties and other income) cover the dividend paid.
A reconciliation of dividend cover is shown below:
30 June 30 June 31 Dec
2022 2021 2021
£'000 £'000 £'000
Profit for the period 106,008 (72,793) 156,023
Add back: Unrealised gains on revaluation of
investment properties (89,314) (86,976)
(47,981)
Losses / (gains) on sales of investment
properties realised 5 (1,353) (34,397)
Other Income (42) (3,008) (3,008)
Profit before investment gains and losses (a) 16,657 20,451 31,642
and other income
Dividends (b) 16,790 16,780 33,448
Dividend Cover percentage (c = a/b) (c) 98.2 121.9 94.6
Dividend Yield - The dividends paid during the period divided by the share
price at the period end. An analysis of dividends is contained in note 2 to the
accounts.
Net Gearing - Borrowings less cash divided by total assets (less current
liabilities and cash).
Portfolio (Property) Capital Return - The change in property value during the
period after taking account of property purchases and sales and capital
expenditure, calculated on a quarterly time-weighted basis. The calculation is
carried out by MSCI Inc.
Portfolio (Property) Income Return - The income derived from a property during
the period as a percentage of the property value, taking account of direct
property expenditure, calculated on a quarterly time-weighted basis. The
calculation is carried out by MSCI Inc.
Portfolio (Property) Total Return - Combining the Portfolio Capital Return and
Portfolio Income Return over the period, calculated on a quarterly
time-weighted basis. The calculation is carried out by MSCI Inc.
Total Return - The theoretical return to shareholders calculated on a per share
basis by adding dividends paid in the period to the increase or decrease in the
Share Price or NAV. The dividends are assumed to have been reinvested in the
form of Ordinary Shares or Net Assets, respectively, on the date on which they
were quoted ex-dividend.
EPRA Performance Measures
EPRA earnings and EPRA earnings per share - EPRA earnings represents the
earnings from core operational activities, excluding investment property
revaluations and gains/losses on asset disposals. It demonstrates the extent
to which dividend payments are underpinned by recurring operational activities.
Six months to 30 June 2022 Six months to 30 Year to 31
£'000 June 2021 December 2021
£'000 £'000
Profit per IFRS income statement 106,008 72,793 156,023
Exclude:
Unrealised gains on investment (89,314) (47,981) (86,976)
properties
Losses / (gains) on sales of investment (1,353) (34,397)
properties 5
EPRA earnings 16,699 23,459 34,650
Weighted average number of shares in 737,306 798,724 786,826
issue (000's)
EPRA earnings per share (pence per 2.3 2.9 4.4
share)
EPRA Net Tangible Assets - Assumes that entities buy and sell assets, thereby
crystallising certain levels of unavoidable deferred tax.
Six months to Six months to Year to 31
30 June 2022 30 June 2021 December 2021
£'000 £'000 £'000
IFRS NAV 1,069,562 990,434 1,017,520
Fair value of interest rate swaps (1,040) - (307)
Net assets used in per share calculation 1,068,522 990,434 1,017,213
Shares in issue (000's) 719,886 793,366 753,107
EPRA assets per share (pence per share) 148.4 124.8 135.1
All enquiries to:
The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St. Peter Port
Guernsey GY1 3QL
Tel: 01481 745324
Fax: 01481 745051
Richard Kirby
BMO REP Asset Management plc
Tel: 0207 499 2244
The full interim report for the period to 30 June 2022 will be sent to
shareholders and will be available for inspection at Trafalgar Court, Les
Banques, St Peter Port, Guernsey GY1 3QL, the registered office of the Company,
and from the Company's website: www.balancedcommercialproperty.com
END
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