UK Comm Prop Tst Ltd Net Asset Value(s)

 
TIDMUKCM 
 
10 October 2016 
 
UK Commercial Property Trust Limited ("UKCPT" or "the Company") 
 
                     Net Asset Value at 30 September 2016 
 
UK Commercial Property Trust Limited (LSE: UKCM), the largest Guernsey based, 
UK focused, London listed commercial property investment company, which is 
advised by Standard Life Investments, announces its unaudited quarterly Net 
Asset Value ("NAV") as at 30 September 2016. 
 
·     NAV per share of 83.7p (30 June 2016: 86.5p), resulting in a NAV total 
return of -2.2% over the period; 
 
·     Like-for-like portfolio capital value decline of 2.7% during the quarter. 
This compares favourably to the fall in the IPD Monthly index for just the two 
months of July and August of 3.4%, highlighting the defensive qualities of the 
Company's portfolio; 
 
·     Void rate of 2.7%*, well below the IPD benchmark figure of 6.7%**; 
 
·     Positive leasing activity post the EU referendum delivering sixteen new 
or renewed leases which secured GBP1.7m of annual rental income. Transactions of 
note include; 
 
             ·     A 10 year lease renewal of Craven House, an office building 
in Soho, London at GBP1,027,250 per annum, an increase of 37%; 
 
 
             ·     Good tenant progress at the Company's Shrewsbury shopping 
centres, generating GBP232,400 per annum of income from four new leases at - New 
Look Menswear, Smiggle, The Body Shop and Yours Clothing; 
 
 
             ·     A 10 year lease renewal within 9 Colmore Row, an office 
building in Birmingham, at GBP105,150 per annum, an increase of 15%; 
 
·     Strong financial resources with GBP112 million cash as at 30 September of 
which GBP70 million is available for investment after allowing for dividend and 
capital expenditure commitments. Additional cash in the form of a GBP50 million 
revolving credit facility is available; 
 
·     Low net gearing of 11.2%*** (gross gearing of 18.7%***) remaining one of 
the lowest in the Company's peer group and also the quoted REIT sector; 
 
·     Attractive dividend yield of 4.7%*, which compares favourably to the FTSE 
All-Share Index (3.5%*) and FTSE REIT Index (3.6%*). 
 
*30 September 2016 
 
** 30 June 2016 
 
*** Net gearing - Gross borrowing less cash divided by total assets (excluding 
cash) less current liabilities 
 
        Gross gearing - Gross borrowings divided by total assets less current 
liabilities 
 
Andrew Wilson, Chairman of UKCPT commented: "Whilst any fall in value is 
disappointing, it is at such times that the Company's strong income component 
shows its value. It is also pleasing to see the combination of successful asset 
management and UKCPT's strong defensive characteristics provide a brake on 
capital change when compared to the IPD index while still delivering an 
attractive income yield." 
 
Breakdown of NAV movement 
 
Set out below is a breakdown of the change to the unaudited net asset value per 
share calculated under International Financial Reporting Standards ("IFRS") 
over the period from 1 July 2016 to 30 September 2016. 
 
UK Commercial         Per  Share (p)   Attributable        Comment 
Property Trust                          Assets (GBPm) 
Limited 
 
Net assets as at 1         86.5         1,124.6 
July 2016 
 
Unrealised increase        -2.6          -33.7      Like for like decrease 
in valuation of                                     of 2.7% in property 
property portfolio                                  portfolio 
 
Capital expenditure        -0.1           -1.4      Principally relates to 
during the period                                   costs associated with 
                                                    ongoing work at 
                                                    Shrewsbury to deliver 
                                                    the Primark store. 
 
Income earned for the      1.3            16.2      Dividend cover of 90% 
period                                              for the nine months to 
                                                    30 Sep 16 with GBP70m 
                                                    still available for 
                                                    investment. For the 
                                                    quarter, dividend 
                                                    cover was 81% 
                                                    following the sale of 
Expenses for the           -0.5           -6.5      Arlington Street and 
period                                              Dolphin House and a 
                                                    revenue deduction 
                                                    attributable to the 
                                                    BHS administration 
Dividend paid on 31        -0.9          -12.0      which will not recur. 
August 2016 
 
 
 
Interest rate swaps        0.0            0.0       Marginal increase in 
mark to market                                      swap liabilities (GBP 
revaluation                                         50k)as interest rates 
                                                    continue to fall 
 
Net assets as at 30        83.7         1,087.2 
Sep 2016 
 
The NAV per share is based on the external valuation of the Company's direct 
property portfolio. It includes all current period income and is calculated 
after the deduction of all dividends paid prior to 30 September 2016. It does 
not include provision for any unpaid dividends relating to periods prior to 30 
September 2016, i.e. the proposed dividend for the period to 30 September 2016. 
 
The NAV per share at 30 September 2016 is based on 1,299,412,465 shares of 25p 
each, being the total number of shares in issue at that time. 
 
The EPRA NAV per share (excluding swap liability) is 84.1p (Jun 2016 - 87.0p). 
 
Sector Analysis 
 
                    Portfolio Value Exposure as at  Like for Like   Capital Value 
                     as at 30 Sep    30 Sep 2016    Capital Value       Shift 
                       2016 (GBPm)         (%)         Shift (excl      (including 
                                                       sales &      transactions) 
                                                      purchases)           (GBPm) 
 
                                                         (%) 
 
Valuation as of 30                                                     1,282.4 
Jun 2016 
 
Retail                   440.8           35.3            -4.5           -20.8 
 
High St - South                          3.0             -1.5            -0.6 
East 
 
High St- Rest of UK                      2.7             -1.7            -0.6 
 
Shopping Centres                         7.3             -9.3            -9.4 
 
Retail Warehouse                         22.3            -3.5           -10.2 
 
Offices                  285.8           22.9            -3.8           -11.3 
 
City                                     2.2             -5.2            -1.5 
 
West End                                 8.8             -5.8            -6.7 
 
South East                               1.7             -4.1            -0.9 
 
Rest of UK                               10.2            -1.7            -2.2 
 
Industrial               395.9           31.7            -0.1            -0.5 
 
South East                               23.2            -0.2            -0.5 
 
Rest of UK                               8.5             0.0             0.0 
 
Leisure/Other            125.9           10.1            -1.1            -1.4 
 
External valuation      1,248.4         100.0            -2.7          1,248.4 
at 30 Sep 
 
Whilst uncertainty has diminished over the quarter, CBRE Ltd continue to 
include a diluted "market conditions" caveat in the vast majority of the 
valuations they undertook as at 30 September 2016. This caveat is as follows: 
 
"Following the Referendum held on 23 June 2016 concerning the UK's membership 
of the EU, a decision was taken to exit.  Since that date we have monitored 
market transactions and market sentiment in arriving at our opinion of Market 
Value/Fair Value.  After an initial period of uncertainty and an absence of 
activity, transactional volumes and available evidence has risen in most 
sectors of the market and liquidity is returning to more normal levels.  This 
has led to a generally more stable outlook for the market.   However, there 
remains a paucity of comparable transactions in central London offices, 
development land and buildings, retail parks and large shopping centres and 
therefore valuations in these sectors reflect a greater degree of judgement." 
 
For further information please contact: 
 
Will Fulton / Graeme McDonald, Standard Life Investments 
Tel: [phone] 
 
Edward Gibson-Watt / Oliver Kenyon, J.P. Morgan Cazenove 
Tel: [phone] 
 
Richard Sunderland / Claire Turvey / Clare Glynn, FTI Consulting 
Tel: [phone] 
 
The above information is unaudited and has been calculated by Standard Life 
Investments Limited. 
 
 
 
END 
 

(END) Dow Jones Newswires

October 10, 2016 02:00 ET (06:00 GMT)