F&C UK Real Estate Investments Ltd - Net Asset Value

To:                  Company Announcements
Date:               25 October 2018
Company:         F&C UK Real Estate Investments Limited
LEI:                 231801XRCB89W6XTR23

Subject:           Net Asset Value
 

Net Asset Value

The unaudited net asset value per share of F&C UK Real Estate Investments Limited (“FCRE”) as at 30 September 2018 was 107.3 pence. This represents a decrease of 1.1 per cent from the net asset value per share as at 30 June 2018 of 108.5 pence and a NAV total return for the quarter of 0.1 per cent.

The net asset value is based on the external valuation of the Group's property portfolio prepared by Cushman & Wakefield.

The net asset value is calculated under International Financial Reporting Standards ("IFRS").

The net asset value includes all income to 30 September 2018 and is calculated after deduction of all dividends paid prior to that date.  It does not include a provision for the dividend for the quarter to 30 September 2018, which is expected to be paid in December 2018.

Share Price

The share price was 95.6 pence per share at 30 September 2018, which represented a discount of 10.9 per cent to the NAV per share announced above. The share price total return for the quarter was -3.0 per cent.
 

Breakdown of NAV movement

Set out below is a breakdown of the change to the unaudited net asset value per share calculated under IFRS over the period from 30 June 2018 to 30 September 2018.

	Pence per share	% of opening NAV
Net asset value per share as at 30 June 2018	108.5
Unrealised movement in valuation of property portfolio (including the effect of gearing)	(1.0)	(0.9)*
Movement in revenue reserves	(0.2)	(0.2)
Net asset value per share as at 30 September 2018	107.3	(1.1)

* The un-geared decrease in the valuation of the property portfolio over the quarter to 30 September 2018 was 0.6%.

The net gearing as at 30 September 2018 was 26.3% #

# Bank debt (less net current assets) divided by fair value of investment properties
 

Performance

The capital value of the portfolio decreased by 0.6% over the quarter, compared to the IPD Monthly Index which recorded capital value growth of 0.4% over the period. The retail market remains a challenge with High Street and retail warehouse capitalisation rates moving out over the quarter. The Company has also been impacted by the Homebase Company Voluntary Arrangement (‘CVA’) which specifically affects the values of properties held at Enterprise Way, Luton and Northfields Road, Rotherham. Active asset management initiatives are focused on restoring income and value.
 

Portfolio Analysis	£m	% of portfolio as at 30 September 2018	% capital value movement  in quarter
Offices	89.9	25.7	0.7
West End	28.2	8.1	-
South East	29.3	8.3	-
Rest of UK	32.4	9.3	2.1
Retail	57.7	16.5	(3.4)
West End	8.5	2.4	-
Rest of London	3.4	1.0	(6.8)
South East	17.5	5.0	(4.1)
Rest of UK	28.3	8.1	(3.6)
Industrial	131.9	37.6	1.7
South East	131.9	37.6	1.7
Retail Warehouse	70.9	20.2	(4.1)
Rest of UK	61.4	17.5	(5.3)
Rest of London	9.5	2.7	4.4
Total Property	350.4	100.0	(0.6)

Property Purchases and Sales

During the quarter, the Group completed the sale of an office building, in Swindon for £1.1 million.

There were no other sales or purchases in the quarter.

 

Summary Balance Sheet

	£m	Pence per share	% of Net Assets
Property Portfolio per Valuation Report	350.4	145.5	135.6
Adjustment for lease incentives	(4.4)	(1.8)	(1.7)
Fair Value of Property Portfolio	346.0	143.7	133.9
Cash	15.7	6.5	6.1
Trade and other receivables	6.0	2.5	2.3
Trade and other payables	(7.0)	(2.9)	(2.7)
Interest-bearing loans	(102.4)	(42.5)	(39.6)
Net Assets at 30 September 2018	258.3	107.3	100.0

The property portfolio will next be valued by an external valuer during December 2018 and the net asset value per share as at 31 December 2018 will be announced in January 2019.

This announcement contains inside information.

Enquiries:
The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL
Tel: [phone]
Fax: [phone]

Peter Lowe
Scott Macrae
F&C Investment Business Ltd
Tel: [phone]
Fax: [phone]

Copyright r 24 PR Newswire