Standard LifeInvProp Unaudited Net Asset Value

 
TIDMSLI 
 
20 October 2015 
 
STANDARD LIFE INVESTMENTS PROPERTY INCOME TRUST LIMITED (LSE: SLI) 
 
Unaudited Net Asset Value as at 30 September 2015 
 
Key Highlights 
 
  * Net asset value per ordinary share was 80.9p as at 30 September 2015, an 
    increase of 3.1% from 30 June 2015 resulting in a NAV total return of 4.5% 
    for Q3; 
  * The property portfolio produced a total return of 4.3%, significantly 
    outperforming the 3.4% total return on the MSCI (formerly IPD) Monthly 
    Index over the same period; 
  * In Q3, four office properties purchased for GBP18.0m excluding costs, two 
    industrial properties purchased for GBP6.0m excluding costs and one retail 
    property purchased for GBP5.1m excluding costs; 
  * Three industrial properties sold during Q3 for GBP7.7m excluding costs, as 
    well as one retail property sold for GBP5.3m excluding costs and one office 
    property sold for GBP5.5m excluding costs; 
  * Dividend yield of 5.4% based on share price of 86.5p (15 October 2015) 
    comparing favourably to the yield on the FTSE All-Share REIT Index (2.7%) 
    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 September 2015 was 80.9p. This 
is an increase of 3.1% over the net asset value of 78.5p per share at 30 June 
2015. The net asset value is calculated under International Financial Reporting 
Standards ("IFRS"). 
 
The net asset value incorporates the external portfolio valuation by Jones Lang 
LaSalle at 30 September 2015. The property portfolio will next be valued by the 
external valuer during December 2015 and the next quarterly net asset value 
will be published thereafter. 
 
Breakdown of NAV movement 
 
Set out below is a breakdown of the change to the unaudited NAV per share 
calculated under IFRS over the period 30 June 2015 to 30 September 2015. 
 
                                                     GBPm   Pence   % of opening 
                                                            per            NAV 
                                                          share 
 
Unaudited Net Asset Value at 30 June 2015         226.4    78.5              - 
 
Gain - unrealised on the standing portfolio         7.8     2.7           3.5% 
following revaluation of property portfolio 
 
Gain - on sale of properties                        0.8     0.3           0.4% 
 
Costs on the purchase of investment property      (0.8)   (0.3)         (0.4%) 
 
Increase in unrealised interest rate swap         (0.7)   (0.2)         (0.3%) 
liability 
 
Other movement in reserves                        (0.3)   (0.1)         (0.1%) 
 
Unaudited Net Asset Value at 30 September 2015    233.2    80.9           3.1% 
 
 
 
 
European Public Real Estate Association            30 Sep 2015   30 Jun 2015 
("EPRA")* 
 
EPRA Net Asset Value                                   GBP235.8m       GBP228.3m 
 
EPRA Net Asset Value per share                           81.8p         79.2p 
 
 
The Net Asset Value per share is calculated using 288,387,160 shares of 1p each 
being the number in issue on 30 September 2015. 
 
* 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 
 
The UK commercial real estate market continues to benefit from strong 
investment and improving tenant demand. Given the lack of new construction over 
the last 8 years, the supply of good quality accommodation is low in most 
markets and this is leading to rental growth momentum starting to build. The 
relatively high margin of real estate yields over UK Gilts means the sector 
remains popular with investors, both overseas and domestic. 
 
During the third quarter we were able to complete a number of asset management 
initiatives, the main one being two lease regears and a new lease at White Bear 
Yard London - the new leases have moved the rents up in the building and 
provide a greater ability for us to extend the building in the future by having 
all lease expiries at the same time. We also completed the lease at Ocean Trade 
Centre to CCF (part of Travis Perkins) and, after the quarter end, signed the 
Scottish Ministers on the remaining vacant units - all on 10 year leases. In 
order to maximise income we granted a short term lease expiry on an industrial 
unit in Oldham taking the rent from GBP4.50psf to GBP8.50psf for a 12 month 
extension. 
 
Following the completion of the purchase of three offices and a retail 
warehouse at the beginning of the quarter (reported with the Q2 NAV), we also 
completed the purchase of two single let logistics units and an office for a 
total of GBP10.7m, the sale of an office in Glasgow for GBP5.7m and of a standalone 
retail warehouse for GBP5.3m. 
 
As already notified to the market, the Company has signed heads of terms to 
acquire a portfolio of 22 UK commercial properties for a cash consideration of 
approximately GBP165m. We are making good progress on our due diligence and hope 
to update further through the publication of a prospectus in early November. 
 
Cash position 
 
As at 30 September 2015 the Company had borrowings of GBP84.4m and a cash 
position of GBP16.3m (excluding rent deposits) therefore cash as a percentage of 
debt was 19.3%. 
 
Dividends 
 
The Company paid an interim property income dividend in respect of the quarter 
ended 30 June 2015 of 1.161p per Ordinary Share, with ex-dividend and payment 
dates of 6 August 2015 and 21 August 2015 respectively. 
 
Loan to value and interest rate 
 
As at 30 September 2015 the loan to value ratio (assuming all cash is placed 
with RBS as an offset to the loan balance) was 22.1% (30 June 2015: 19.8%). The 
bank covenant level is 65%. As a result of interest rate swaps the weighted 
average interest rate on the loan is fixed at 3.7% until the loan matures in 
December 2018. 
 
Net Asset analysis as at 30 September 2015 (unaudited) 
 
                                     GBPm     % of net 
                                              assets 
 
Office                            129.5         55.5 
 
Retail                             64.0         27.4 
 
Industrial                        115.3         49.4 
 
Total Property Portfolio          308.8        132.3 
 
Adjustment for lease              (2.3)        (0.9) 
incentives & sales costs on 
assets held for sale 
 
Fair value of Property            306.5        131.4 
Portfolio 
 
Cash                               16.3          7.0 
 
Other Assets                        4.6          2.0 
 
Total Assets                      327.4        140.4 
 
Non-current liabilities          (86.7)       (37.2) 
 
Current liabilities               (7.5)        (3.2) 
 
Total Net Assets                  233.2        100.0 
 
Breakdown in valuation movements over the period 1 Jul 2015 to 30 Sep 2015 
 
                             Exposure as  Capital Value   Capital 
                             at 30 Sept    Movement on     Value 
                              2015 (%)      Standing    Movement on 
                                          Portfolio (%) Portfolio (GBP 
                                                             m) 
 
External Property Valuation                                288.4 
at 30 Jun 2015 
 
IPD Sub Sector Analysis: 
 
RETAIL 
 
South East Retail                5.4           0.8          0.1 
 
Retail Warehouses               15.3           1.2          0.3* 
 
OFFICES 
 
London City Offices              6.6          13.6          2.4 
 
London West End Offices          3.4           1.8          0.2 
 
South East Offices              22.6           2.6         15.7* 
 
Rest of UK Offices               9.3           2.7          0.1* 
 
INDUSTRIAL 
 
South East Industrial            9.8           4.2          4.5* 
 
Rest of UK Industrial           27.6           2.3         (2.9)* 
 
External Property Valuation     100.0          3.0         308.8 
at 30 Sep 2015 
 
*Inclusive of Q3 purchases and sales 
 
Top 10 Properties 
 
 
                                       30 Sep 15 (GBPm) 
 
White Bear Yard, London                    20-25 
 
DSG, Preston                               15-20 
 
Chester House, Farnborough                 15-20 
 
Symphony, Rotherham                        15-20 
 
Denby 242, Denby                           10-15 
 
Hertford Place, Rickmansworth              10-15 
 
St James's House, Cheltenham               10-15 
 
3B - C Michigan Drive, Milton Keynes       10-15 
 
Hollywood Green, London                    10-15 
 
Bourne House, Staines Upon Thames          10-15 
 
The Board is not aware of any other significant events or transactions which 
have occurred between 30 September 2015 and the date of publication of this 
statement which would have a material impact on the financial position of the 
Company. 
 
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 [phone] or [e-mail] 
 
Gordon Humphries - Head of Investment Companies Standard Life Investments 
Tel [phone] or [e-mail] 
 
The Company Secretary 
Northern Trust International Fund Administration Services (Guernsey) Ltd 
Trafalgar Court 
Les Banques 
St Peter Port 
GY1 3QL 
Tel: [phone] 
Fax: [phone] 
 
 
 
END 
 

(END) Dow Jones Newswires

October 20, 2015 02:01 ET (06:01 GMT)