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SLI Standard Life Investments Property Income Trust Ld

79.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Standard Life Investments Property Income Trust Ld LSE:SLI London Ordinary Share GB0033875286 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% 79.00 79.00 79.40 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Standard LifeInvProp Net Asset Value(s)

26/07/2017 7:00am

UK Regulatory


 
TIDMSLI 
 
26 July 2017 
 
STANDARD LIFE INVESTMENTS PROPERTY INCOME TRUST LIMITED (LSE: SLI) 
 
Unaudited Net Asset Value as at 30 June 2017 
 
Key Highlights 
 
Solid Performance 
 
  * Net asset value ("NAV") per ordinary share at 30 June 2017 was 83.9p (31 
    Mar - 81.4p), a rise of 3.1%, resulting in a NAV total return, including 
    dividends, of 4.6% for Q2; 
  * The portfolio valuation increased by 2.0% on a like for like basis, whilst 
    the IPD/MSCI Monthly Index rose by 1.1% over the same period. 
 
Positive portfolio activity 
 
  * Sale of Matalan, Bradford for GBP3.8m, removing future letting risk and 
    capital expenditure; 
  * Four new lettings in the period securing GBP401,000 of income plus three rent 
    reviews generating additional income of GBP19,000 per annum; 
  * Post period end purchases of multi let offices in Reading for GBP13.24m, 
    reflecting an initial yield of 6.75% and in Manchester for GBP8.1m reflecting 
    an initial yield of 6.4% with opportunities for asset management. 
 
 
Strong balance sheet with prudent gearing 
 
  * LTV of 23.8% (after the purchases of Reading and Manchester) with RCF of GBP 
    30m still available for investment in future opportunities; 
 
Premium rating 
 
  * Share price total return of 3.1% in the quarter comparing favourably to the 
    return on the FTSE All-Share Index of 1.4% and the FTSE All-Share REIT 
    Index of 1.9% over the same period; 
 
  * The Company's shares traded at a premium to NAV of 6.4% as at 30 June 2017. 
 
Attractive dividend yield 
 
  * Dividend yield of 5.3% based on a quarterly dividend of 1.19p as at 30 June 
    2017 compares favourably to the yield on the FTSE All-Share REIT Index 
    (3.6%) and the FTSE All Share Index (3.6%) as at the same date. 
 
Net Asset Value ("NAV") 
 
The unaudited net asset value per ordinary share of Standard Life Investments 
Property Income Trust Limited ("SLIPIT") at 30 June 2017 was 83.9p. The net 
asset value is calculated under International Financial Reporting Standards 
("IFRS"). 
 
The net asset value incorporates the external portfolio valuation by Knight 
Frank at 30 June 2017. The next valuation will be undertaken on 30 September 
2017. 
 
Breakdown of NAV movement 
 
Set out below is a breakdown of the change to the unaudited NAV calculated 
under IFRS over the period 1 April 2017 to 30 June 2017. 
 
                                Per     Attributable              Comment 
                               Share    Assets (GBPm) 
                                (p) 
 
Net assets as at 31 March       81.4       316.4 
2017 
 
Unrealised increase in          2.1         8.2       Like for like increase of 2% in 
valuation of property                                 property portfolio 
portfolio 
 
CAPEX in the quarter            -0.2        -0.5      Predominantly relates to asset 
                                                      management initiatives at Gavin 
                                                      Way, Birmingham and Kings 
                                                      Business Park, Bristol 
 
Net income in the quarter       0.3         1.2       One off dilapidation receipts 
after dividend                                        of GBP925k contributed to 
                                                      dividend cover of 127% 
 
Interest rate swaps mark to     0.3         1.1       Decrease in swap liabilities in 
market revaluation                                    the quarter 
 
Net assets as at 30 June 2017   83.9       326.4 
 
 
                                                            30 Jun  2017    31 Mar 2017 
   European Public Real Estate Association ("EPRA")* 
 
   EPRA Net Asset Value                                          GBP329.0m        GBP320.1m 
 
   EPRA Net Asset Value per share                                  84.6p          82.3p 
 
 
The Net Asset Value per share is calculated using 388,815,419 shares of 1p each 
being the number in issue on 30 June 2017. 
 
* The EPRA net asset value measure is to highlight the fair value of net assets 
on an on-going, long-term basis. Assets and liabilities that are not expected 
to crystallise in normal circumstances, such as the fair value of financial 
derivatives, are therefore excluded. 
 
Investment Manager Commentary 
 
Although the Company has maintained low voids for several years, the void rate 
increased in the quarter to 6.7% (31 March - 3.2%) as three units became 
vacant.  The new voids are dominated by an industrial unit in Rainham, where we 
already have an interested party, and two office suites in Southampton and 
Crawley. We have initial interest in Southampton and are about to start a 
refurbishment in Crawley, where we expect strong demand for the unit. Of the 
older voids, the most significant is an industrial unit in Oldham where, 
although there was letting interest, we have instead agreed terms to sell the 
unit. 
 
Letting has generally gone well with a number of smaller transactions having 
been completed over the quarter with rent totalling GBP401,000 pa. 
 
The investment side was quieter over the quarter with the sale of a retail 
warehouse unit let to Matalan for GBP3.8m. Since the quarter end, however, we 
have reinvested our cash into two offices for a total of GBP21.3m (excl costs). 
Both offices are multi let, one in Reading close to the train station, and the 
other in Manchester close to the City centre. They were bought off market at 
yields of 6.75% and 6.4% respectively. 
 
The Company had a strong quarter in Q2 with capital growth of the assets of 
2.0% against the IPD/ MSCI monthly index growth of 1.1%. This, combined with an 
above market income yield boosted by one-off dilapidation receipts, led to a 
NAV total return in the quarter of 4.6%. 
 
The Company had repaid all borrowings under the Revolving Credit facility at 
the end of the quarter and the Company's overall LTV at 30 June 2017 was 19.9%. 
Since the quarter end the Company re-drew GBP5m of the RCF for the most recent 
purchases resulting in the LTV increasing to 23.8%. The valuation of the 
interest rate swap against the term loan moved in the Company's favour during 
the quarter and now stands at a liability of GBP2.6million. 
 
Market Commentary 
 
The resilience of the UK economy, which showed post the Brexit referendum vote, 
has faded into 2017.  A weaker consumer sector, impacted by a squeeze on 
spending power, caused the economy to grow by only 0.2% in the first quarter of 
2017, a pronounced slowdown from the 0.7% growth recorded in Q4 2016. A series 
of softer output data released recently has also dampened hopes of a strong 
rebound for Q2. As wages lag further behind inflation, forecasts for household 
spending continue to be mixed, despite the employment rate in the three-month 
period to May showing the strongest rise since 1975. 
 
Wage growth is one of the key indicators that the Bank of England is monitoring 
closely as in recent weeks the Monetary Policy Committee (MPC) has become 
increasingly divided as to the timing of shifting its policy stance. 
Ultimately, the MPC's interest rate decision is dependent on how the economy 
evolves and currently the Bank's forecast GDP growth is at a solid 1.9% for the 
calendar year 2017. Our in-house forecast, however, is for slower growth and 
implies a small increase in UK spare capacity which should ease the MPC's 
concerns about a trade-off between growth and inflation and any interest rate 
increases are therefore expected to be gradual and modest. 
 
Within the real estate sector, All Property (as measured by MSCI/IPD) recorded 
a total return of 1.1% in the quarter. The industrial and logistic distribution 
sector has continued to demonstrate its strength generating a total return of 
4.6%.   Retail and offices fell behind industrial with similar total returns 
for the quarter of 1.8% and 1.9% respectively. Office returns are feeling the 
impact of political uncertainty feeding into the leasing market. Rents remained 
largely stable over the last three months with retail rental growth of 0.1%, 
office rental growth of 0.3% and industrial rental growth of 1% over the 
quarter. 
 
Looking over the last twelve months, All Property (as measured by MSCI/IPD) 
recorded a total return of 5.1% p.a. Market conditions and sentiment have 
stabilised following the capital decline after the Brexit referendum. Capital 
values fell by 0.5% p.a. in the year to end June with an income return of 5.6% 
driving performance. In terms of a sector analysis, the industrial sector has 
continued to demonstrate its strength generating a total return of 12.4% p.a. 
Retail was no longer the laggard sector in the same period, recording total 
returns of 3.0% p.a., ahead of offices which recorded total returns of 2.2% 
p.a. reflecting the political uncertainties associated with the sector. 
 
Investment Outlook 
 
UK real estate continues to provide an elevated yield compared to other assets 
and the market has stabilised following the post Brexit upheaval last year. 
Furthermore, lending to the sector is at a lower level than in 2007/2008 and 
liquidity remains reasonable. Additionally, development continues to be 
relatively constrained by historic standards, and existing vacancy rates are 
below average levels in most markets, which should all help to maintain the 
positive returns the sector is currently recording.  In this environment, the 
steady secure income component generated by the asset class is likely to be the 
key driver of returns going forward. 
 
The market is likely to continue to be sentiment driven in the short term as 
the politics and economic impact associated with the UK's withdrawal from the 
European Union continues to evolve. The retail sector continues to face a 
series of headwinds that may hold back recovery in weaker locations due to 
oversupply and structural issues. Given the backdrop of continuing heightened 
macro uncertainty, investors are becoming more risk averse and better quality 
assets are once again broadly outperforming those of poorer quality. 
 
Dividends 
 
The Company paid total dividends in respect of the quarter ended 31 March 2017 
of 1.19p per Ordinary Share, with a payment date of 31 May 2017. 
 
Net Asset analysis as at 30 June 2017 (unaudited) 
 
                               GBPm            % of net assets 
 
Office                        123.7                37.9 
 
Retail                        93.9                 28.7 
 
Industrial                    200.5                61.4 
 
Total Property                418.1               128.0 
Portfolio 
 
Adjustment for lease          -4.0                 -1.2 
incentives 
 
Fair value of Property        414.1               126.8 
Portfolio 
 
Cash                          26.7                 8.2 
 
Other Assets                   6.8                 2.1 
 
Total Assets                  447.6               137.1 
 
Current liabilities           -9.5                 -2.9 
 
Non-current liabilities      -111.7               -34.2 
(bank loans & swap) 
 
Total Net Assets              326.4               100.0 
 
Breakdown in valuation movements over the period 1 Apr 2017 to 30 Jun 2017 
 
                           Portfolio   Exposure as  Like for Like  Capital Value 
                          Value as at  at 30 June   Capital Value   Shift (incl 
                            30 June     2017 (%)     Shift (excl    transactions 
                           2017 (GBPm)                transactions &      (GBPm) 
                                                        CAPEX) 
 
                                                         (%) 
 
External valuation at 31                                               413.7 
Mar 17 
 
Retail                       93.9         22.4           0.2            -3.6 
 
South East Retail                          6.7           1.4            0.4 
 
Rest of UK Retail                          1.2           -8.5           -0.4 
 
Retail Warehouses                         14.5           0.5           -3.6* 
 
Offices                      123.7        29.6           1.9            2.4 
 
London West End Offices                    3.2           16.1           1.9 
 
South East Offices                        23.2           0.5            0.5 
 
Rest of UK Offices                         3.2           0.0            0.0 
 
Industrial                   200.5        48.0           2.9            5.6 
 
South East Industrial                     12.4           0.8            0.4 
 
Rest of UK Industrial                     35.6           3.6            5.2 
 
External valuation at 30     418.1        100.0          2.0           418.1 
Jun 2017 
 
*Includes sale of Bradford 
 
Top 10 Properties 
 
 
                                       30 Jun 17 (GBPm) 
 
Denby 242, Denby                           15-20 
 
Elstree Tower, Borehamwood                 15-20 
 
Symphony, Rotherham                        15-20 
 
DSG, Preston                               15-20 
 
Chester House, Farnborough                 15-20 
 
New Palace Place, London                   10-15 
 
Howard Town Retail Park, High Peak         10-15 
 
Charter Court, Slough                      10-15 
 
Hollywood Green, London                    10-15 
 
Eden Street, Kingston upon Thames          10-15 
 
Top 10 tenants 
 
     Tenant group                    Passing     As % of total 
                                     rent        rent 
 
1    Sungard Availability Services   1,320,000          4.7 
     (UK) Ltd 
 
2    BAE Systems plc                 1,257,640          4.5 
 
3    Techno Cargo Logistics Ltd      1,242,250          4.4 
 
4    DSG Retail Limited              1,177,677          4.2 
 
5    The Symphony Group Plc          1,080,000          3.8 
 
6    Bong UK                         741,784            2.7 
 
7    Euro Car Parts Ltd              736,355            2.7 
 
8    Ricoh UK Limited                696,995            2.5 
 
9    CEVA Logistics Limited          614,937            2.2 
 
10   Thyssenkrupp Materials (UK) Ltd 590,000            2.1 
 
                                     9,457,638         33.8 
 
     Total Fund Passing Rent         27,978,184 
 
Regional Split 
 
South East               43.4% 
 
East Midlands            15.3% 
 
North West               12.8% 
 
North East                9.6% 
 
West Midlands             6.6% 
 
Scotland                  5.0% 
 
South West                4.1% 
 
London West End           3.2% 
 
The Board is not aware of any other significant events or transactions which 
have occurred between 30 June 17 and the date of publication of this statement 
which would have a material impact on the financial position of the Company. 
 
The information contained within this announcement is deemed by the Company to 
constitute inside information as stipulated under the Market Abuse Regulations 
(EU) No. 596/2014). Upon the publication of this announcement via Regulatory 
Information Service this inside information is now considered to be in the 
public domain. 
 
Details of the Company may also be found on the Investment Manager's website 
which can be found at: www.standardlifeinvestments.com/its 
 
For further information:- 
 
Jason Baggaley - Real Estate Fund Manager,  Standard Life Investments 
Tel +44 (0) 131 245 2833 or jason_baggaley@standardlife.com 
 
Graeme McDonald  - Real Estate Finance Manager, Standard Life Investments 
Tel +44 (0) 131 245 3151 or graeme_mcdonald@standardlife.com 
 
The Company Secretary 
Northern Trust International Fund Administration Services (Guernsey) Ltd 
Trafalgar Court 
Les Banques 
St Peter Port 
GY1 3QL 
Tel: 01481 745001 
 
 
 
 
END 
 

(END) Dow Jones Newswires

July 26, 2017 02:00 ET (06:00 GMT)

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