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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Abrdn Property Income Trust Limited | LSE:API | 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 | |
---|---|---|---|---|---|---|---|---|---|---|
0.50 | 0.98% | 51.50 | 50.90 | 51.40 | 51.70 | 50.80 | 51.20 | 582,292 | 16:29:58 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Real Estate Agents & Mgrs | 31.11M | -51.05M | -0.1339 | -3.85 | 196.33M |
TIDMSLI NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION IN PARTICULAR THE UNITED STATES, CANADA, AUSTRALIA AND JAPAN This announcement is for information purposes only and shall not constitute an offer to sell or issue or the solicitation of an offer to buy, subscribe for or otherwise acquire any ordinary shares of Standard Life Investments Property Income Trust Limited in any jurisdiction in which any such offer or solicitation would be unlawful. 13 November 2015 RECOMMENDED PROPOSALS IN RELATION TO THE ACQUISITION OF THE NEW PORTFOLIO AND THE INITIAL PLACING AND OFFER FOR SUBSCRIPTION Introduction The Board announces that the Company has entered into the conditional Acquisition Agreement in relation to the acquisition of a new portfolio of 22 UK commercial real estate assets. The Acquisition is to be effected by the Company and the Property Subsidiary acquiring all of the units in the JPUT and the entire issued share capital of the General Partner which holds, through the Limited Partnership, the New Portfolio. The JPUT and the Limited Partnership were established in September 2013 with the principal purpose of investing in and holding the New Portfolio. The New Portfolio comprises 22 UK commercial properties and is complementary to the Company's Property Portfolio (for a detailed analysis of the existing Property Portfolio, the New Portfolio and the Combined Portfolio, please see Appendix I). In order to complete this Acquisition, the Board is proposing to raise up to GBP100 million by issuing New Shares pursuant to an Initial Placing and Offer for Subscription at an Issue Price of 82.0 pence per New Share representing a 2.84 per cent. premium to the NAV per Share as at 30 September 2015 once the accrued dividends for the period ending 30 September 2015 have been deducted. The Board will also need to utilise the New Bank Facility which will allow the Group to borrow up to approximately GBP70.6 million (in addition to the existing Bank Facility) and its existing, available cash reserves of approximately GBP22 million to complete the Acquisition. The Acquisition is considered to be a significant transaction under the Listing Rules and, as a consequence, it requires Shareholder approval. The Listing Rules also provide that the Company must seek Shareholder approval prior to issuing its Shares on a non pre-emptive basis. The Company will shortly publish a Prospectus and Circular which will provide Shareholders with further details of the Acquisition and the Initial Placing and Offer. The Circular will also provide Shareholders with notice of the General Meeting of the Company at which Shareholders will be asked to consider and, if thought fit, pass the Resolutions to approve the Acquisition and issue of New Shares pursuant to the Initial Placing and Offer on a non pre-emptive basis. Reasons for and Benefits of the Acquisition and the Initial Placing and Offer for Subscription The Board believes that the Proposals offer significant benefits for all Shareholders as noted below: The Board believes that if the Proposals are successful, the Company's existing Shareholders will, in particular, benefit from the reduced ongoing charge, the favourable terms of the New Bank Facility Agreement and the lower costs of investing the Company's existing cash reserves in the New Portfolio through the acquisition of the JPUT as opposed to the direct acquisition of UK commercial real estate assets. For these reasons and the reasons set out above, the Board is recommending that Shareholders vote in favour of the Proposals at the General Meeting. Standard Life Investments Pooled Pensions Property Fund has indicated that it intends to subscribe for approximately 7.3 million New Shares for an aggregate price of GBP6 million under the Initial Placing and Offer. The property portfolios The Company's existing Property Portfolio As at 30 September 2015, the Property Portfolio comprised 42 UK commercial properties with an aggregate market value of approximately GBP308.8 million. The Property Portfolio generates a current net annual rent of approximately GBP19.2 million (being an Income Return of 5.9 per cent.) and an aggregate estimated net annual rent of approximately GBP22 million (giving an equivalent yield of 6.7 per cent.). According to the Dun and Bradsheet failure score 74.8 per cent. of the Company's income is from tenants rated as having a negligible or low risk of failure score. The average unexpired lease term to earliest termination of the occupational leases of these Properties (weighted by current gross annual rent) is approximately 7 years and 1 month and all of the rent review provisions in the occupational leases of the Properties are upwards only or subject to fixed/indexed increases. The Company announced on 9 November 2015 that it had completed the sale of the Maple Cross Property for a consideration of GBP14.75 million. The New Portfolio The Company and its Property Subsidiary have entered into the conditional Acquisition Agreement to acquire all of the units in the JPUT and the entire issued share capital of the General Partner. The JPUT holds, indirectly through its interest as the sole limited partner in the Limited Partnership, the New Portfolio. The New Portfolio is diversified by sector, tenant and region and is complementary to the Property Portfolio. The New Portfolio comprises 22 properties UK commercial properties with an aggregate market value of approximately GBP165 million as at 19 October 2015. The New Portfolio generates a current net annual rent of approximately GBP10.8 million (being a net initial yield of 5.96 per cent.). According to the Dun and Broadsheet failure score 82 per cent. of the New Portfolio's income is from tenants rated as having a negligible or low risk of failure score. The average unexpired lease term of the occupational leases of the New Properties (weighted by current gross annual rent) is approximately 4 years and 2 months and all of the rent review provisions in occupational leases of the New Properties are upwards only or have fixed/ indexed increases. The Combined Portfolio In the event that the Resolutions are approved by Shareholders and the Acquisition is completed, the Combined Portfolio will comprise 63 properties with an aggregate market value of GBP460 million (on the basis of the valuations of the Property Portfolio as at 30 September 2015 and the New Portfolio as at 19 October 2015). The Combined Portfolio would generate a current net annual rent of approximately GBP29 million (being a net initial yield of 5.97 per cent.). The average unexpired lease term of the occupational leases of these properties (weighted by current gross annual rent) is approximately 6 years and 2 months, compared to the equivalent figure for an average commercial property portfolio, as represented by the independent IPD IRIS (excluding leases over 35 years), of 7 years and 4 months. The Directors believe that the Combined Portfolio will be accretive to the level of dividend cover and will provide a number of asset management opportunities which should enhance the income profile and the capital value of the assets. Details of the terms of the Proposals The Initial Placing and Offer In order to complete this Acquisition, the Company is proposing to issue up to 121,951,220 New Shares under the Initial Placing and Offer (representing up to approximately 42.3 per cent. of the Company's current issued share capital) to raise up to approximately GBP100 million. The Issue Price is 82.0 pence representing a premium of 2.84 per cent. to the NAV per Share as at 30 September 2015 once the accrued dividends for the period ending 30 September 2015 have been deducted. The net proceeds of the Initial Placing and Offer will be used to fund the Acquisition together with the New Bank Facility and the Company's existing cash resources. If the Initial Placing and Offer does not proceed and Admission does not occur, the Acquisition will not proceed and no funds will be drawn down under the New Bank Facility. The Initial Placing and Offer is conditional on: (i) the Placing Agreement becoming wholly unconditional (save as to Admission) and not having been terminated in accordance with its terms prior to Admission; (ii) the Admission Condition being satisfied prior to 8.00 a.m. on 15 December 2015 (or such later time and/or date, not being later than 8.00 a.m. on 18 December 2015 as the Board may determine); (iii) Shareholder approval being granted in respect of the issue of New Shares, on a non pre-emptive basis, in relation to the Initial Placing and Offer and the Acquisition at the General Meeting; and (iv) the gross proceeds of the Initial Placing and Offer being the equivalent of at least GBP80 million (the "Minimum Issue Proceeds"). The maximum number of New Shares to be issued pursuant to the Initial Placing and Offer will be 121,951,220. In the event that the number of New Shares applied for under the Initial Placing and Offer at the Issue Price results in the Company receiving gross proceeds which are significantly in excess of the size of the Initial Placing and Offer then it would be necessary to scale back such applications. In such event New Shares will be allocated, as far as reasonably possible, so that applications from existing Shareholders are given priority over other applicants, and, where applicable, with a view to ensuring that existing Shareholders are allocated such percentage of New Shares as is as close as possible to their existing percentage holding of Ordinary Shares. The actual number of New Shares issued under the Initial Placing and Offer will be determined by the Company and the Placing Agent, after taking into
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account demand for the New Shares, prevailing market conditions and the acquisition costs of the New Portfolio. The final results of the Initial Placing and Offer and any scaling back will be announced via a Regulatory Information Service. In the event that Admission does not occur, the Acquisition of the New Portfolio will not complete and any monies raised under the Initial Placing and Offer will be returned to investors. The Acquisition The Company and the Property Subsidiary have entered into the conditional Acquisition Agreement with the Vendors dated 12 November 2015. Under this Acquisition Agreement the Company and the Property Subsidiary have agreed to purchase the New Portfolio by way of acquiring all of the units in the JPUT (the sole limited partner in the Limited Partnership) and the entire issued share capital in the General Partner (the general partner of the Limited Partnership). The JPUT was established on 11 September 2013 and its principal activity is to invest in the Limited Partnership which holds the New Portfolio. The JPUT has not taken out any debt. It's income is derived solely through its investment in the New Portfolio, by way of it being the sole limited partner of the Limited Partnership, and its expenditure relates only to administration and advisory expenses and property expenses. Pursuant to the Acquisition Agreement, the aggregate consideration payable for all of the units in the JPUT, shares in the General Partner and the New Portfolio will be approximately GBP165 million adjusted to take into account any accruals and contingencies of the JPUT and the Limited Partnership on the date of completion of the Acquisition. The Company will need to use the net proceeds of the Initial Placing and Offer, the New Bank Facility and its existing cash reserves to fund the Acquisition. The New Properties have been externally valued by Knight Frank with a market value as at 19 October 2015 of approximately GBP165 million. In addition to the conditions to the Initial Placing and Offer (as set out above) including the condition that the Minimum Issue Proceeds require to be raised under the Initial Placing and Offer, the Acquisition Agreement provides that the Acquisition is conditional on: (i) at least GBP80 million (or such lower amount as the Company shall, in its discretion, consider is sufficient to enable it to proceed to completion of the Acquisition) being raised pursuant to the Initial Placing and offer; and (ii) JFSC consent being granted in relation to the change in investment manager of the JPUT on completion. The Acquisition is also conditional upon Shareholder approval being granted in favour of the resolutions at the General Meeting and the satisfaction of all of the conditions precedent in the New Bank Facility Agreement (which are customary for a facility of this nature and include that sufficient funds must be raised under the Initial Placing and Offer to satisfy the Minimum Issue Proceeds). Therefore if the Minimum Issue Proceeds are not raised under the Initial Placing and Offer, the Acquisition will not complete and no new funds will be able to be drawn down under the New Bank Facility. The Acquisition Agreement contains warranties, indemnities and representations customary to agreements of this nature. The liability of the Vendor in relation to these warranties, indemnities and representation has been capped to a nominal value. Therefore warranty and indemnity insurance has been taken out on behalf of the Company and the Property Subsidiary. Completion of the Acquisition is expected to occur on 15 December 2015 immediately after Admission. The parties are entitled to rescind the Acquisition Agreement in the event that the conditions thereto are not satisfied by 18 December 2015. The current intention of the Group is to undertake a restructuring, immediately post Acquisition, involving the New Properties and the subsequent liquidation of the JPUT. Gearing and borrowings The Company has the power under the Articles to borrow an amount up to 65 per cent. of the Group's gross assets. It is the present intention of the Directors that the Company's loan to value ratio (calculated as borrowings less all cash as a proportion of the Property Portfolio valuation) will not exceed 45 per cent. and the Investment Manager is currently instructed to target a LTV between 25 per cent. to 35 per cent. The Group's current borrowings The Group currently has a fully drawn down debt facility of GBP84,432,692 with the Bank which is repayable on 16 December 2018. As at 30 September 2015, the Group's LTV was approximately 22 per cent. Interest on the Bank Facility is payable at a rate equal to the aggregate of three month LIBOR, and a margin of 1.65 per cent. per annum (below 40 per cent. LTV) or 1.75 per cent. per annum (40 to 60 per cent. LTV inclusive) or 1.95 per cent. (above 60 per cent. LTV). The current applicable margin is 1.65 per cent. per annum. The Group has two interest rate swap agreements with the Bank for a notional principal amount of GBP84,432,692 in aggregate which results, based upon current LTV, in the all-in margin in respect of the Group's borrowing being fixed until 16 December 2018 at 3.66 per cent. per annum. If the existing Bank Facility is repaid prior to 16 December 2018 such swaps will require to be broken and the associated termination costs will require to be paid. The Group's proposed additional borrowings on completion of the Acquisition The Property Subsidiary and the Company have entered into the New Bank Facility Agreement with the Bank conditional on, inter alia, the completion of the Acquisition and the satisfaction of the conditions precedent (which are customary for a facility of this nature). The New Bank Facility is in addition to the existing Bank Facility and consists of the New Term Loan of GBP40,567,308 and the Revolving Credit Facility of GBP30,000,000 which amounts to, in aggregate, GBP70,567,308. The Facility Agreement will therefore be amended, subject to the completion of the Acquisition, pursuant to an amendment and restatement agreement (the New Bank Facility Agreement) in order to effect the new terms of the existing Bank Facility and the New Bank Facility. The New Bank Facility Agreement has a term of 18 months. Therefore, as a result of these new arrangements the repayment date, in relation to the existing Bank Facility (as well as the New Bank Facility) has been brought forward from 16 December 2018 to 17 June 2017. Interest will be payable in relation to the existing Bank Facility at the all-in rate of 3.26 per cent. per annum pursuant to the swaps that are already in place (further details on the swaps are set out above) and in relation to the New Bank Facility at a rate equal to the aggregate of the applicable LIBOR rate and a margin of 1.25 per cent. per annum. For illustrative purposes and on the assumption that the maximum amount under the New Bank Facility is required to be drawn down, the Group's maximum level of borrowings (the existing Bank Facility plus the New Bank Facility) will be GBP155 million, and the maximum LTV, once the New Portfolio has been acquired, would be approximately 32 per cent. The structure and terms of the New Bank Facility Agreement provide the Company with the flexibility to make repayments prior to the repayment date of 17 June 2017. Thereby it could reduce the LTV shortly after the completion of the Acquisition with the proceeds of any disposals of New Properties (or existing Properties). In the event the Revolving Credit Facility is repaid in full with the proceeds of any disposals, the Group's maximum LTV (assuming the maximum amount under the New Term Loan is drawn down) could reduce to approximately 28 per cent. The Property Subsidiary will only draw down funds under the New Bank Facility once Admission has occurred on the completion of the Acquisition. The Property Subsidiary does not currently intend to hedge the New Bank Facility. In the light of the current low interest rate environment it is likely that the Group would look to refinance all of their debt (the existing Bank Facility as well as the New Bank Facility) in the near term. As part of the refinancing the Group would have to break the existing interest rate swaps and it would, at that time, consider entering into the new arrangements to mitigate interest rate risk in respect of any new debt incurred. Dividends Dividend policy It is the Board's policy that in paying dividends it should target aggregate annual dividends which are fully covered by the Group's net income. Dividends on the Ordinary Shares are expected to be paid in equal instalments quarterly in respect of each financial year in March, May, August and November. All dividends are paid as interim dividends. Payment of dividends The Company has declared a dividend of 1.161 pence per Share for the quarter ending 30 September 2015 which will be paid on 27 November 2015 to existing Shareholders. The Company expects that its final interim dividend of 1.161 pence per Share in respect of the period to 31 December 2015 will be split into: (i) a fourth interim dividend for the period between 1 October 2015 and 14 December 2015 (the date immediately prior to Admission and the completion of the Acquisition); and (ii) a fifth interim dividend for the period between 15 December 2015 and 31 December 2015. The Company's existing Shareholders will qualify for the fourth and fifth interim dividends in respect of their existing holdings of Ordinary Shares which together equal the equivalent of 1.161 pence for the quarter per Share. New Shares issued pursuant to the Initial Placing and Offer will only qualify for the fifth interim dividend. Save as referred to above, New Shares will rank pari passu with the Ordinary Shares in respect of dividends. In the event that the Acquisition completes, the Board believes that the
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dividend cover would be enhanced. Accordingly if the Acquisition completes it is the Board's intention to increase the quarterly dividend by 2.5 per cent. to 1.19 pence per Share commencing with the quarter ending 31 March 2016. If Admission does not occur and the Acquisition does not proceed, the Board does not intend to increase the dividend in the near term but will continue to keep the Company's dividend policy under review. Costs and expenses of the Proposals The costs and expenses of the Proposals (including the consideration for the purchase price of the JPUT and the New Portfolio, the commission payable to the Placing Agent and the costs in relation to the publication of the Prospectus and the Circular) are expected to be approximately GBP171 million. The New Shares will be issued at a premium of 2.84 per cent. to the NAV per Share as at 30 September 2015 once the accrued dividends for the period ending 30 September 2015 have been deducted. Indicative timetable An indicative timetable of principal events is as follows: Event Indicative Timing Initial Placing and Offer opens 17 November 2015 Publication of Circular and Prospectus 17 November 2015 Latest date for receipt of Application Forms 9 December 2015 under the Offer Latest date for commitments under the Initial 10 December 2015 Placing General Meeting 11 December 2015 Results of the Initial Placing and Offer and 11 December 2015 General Meeting announced Admission and dealings in New Shares commence 15 December 2015 A more detailed timetable will be included in the Prospectus. General In deciding whether or not to vote in favour of the Resolutions at the General Meeting to implement the Proposals, Shareholders should rely only on the information contained in, and should follow the procedures described in, the Circular and the Prospectus. All enquiries: Jason Baggaley/Gordon Humphries, Standard Life Investments Tel: 0131 245 2833/0131 245 2735 Graeme Caton, Winterflood Investment Trusts Tel: 020 3100 0268 Douglas Armstrong, Dickson Minto W.S. Tel: 020 7649 6823 Winterflood Securities Limited, which is authorised and regulated by the Financial Conduct Authority, is acting for the Company and for no-one else in connection with the Proposals and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Winterflood Securities Limited, or for affording advice in relation to the Proposals. Dickson Minto W.S., which is authorised and regulated by the Financial Conduct Authority, is acting for the Company and for no-one else in connection with the Proposals and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Dickson Minto W.S., or for affording advice in relation to the contents of the Proposals. APPENDIX I DETAILS OF THE PROPERTY PORTFOLIO, THE NEW PORTFOLIO AND THE COMBINED PORTFOLIO A detailed description and comparison of the Company's existing Property Portfolio (based on the Valuer's valuation report as at 30 September 2015), the New Portfolio (based on the Knight Frank valuation report as at 19 October 2015) and the Combined Portfolio is set out below: Current net Properties* Sector Region annual rent receivable Properties valued at GBP15 - GBP20 million - Property Portfolio White Bear Yard, Standard London GBP527,334 Clerkenwell, London Office Mid-Town DSG Blackpool Road, Retail North West GBP1,040,895 Preston Warehouse Chester House, Office Park South East GBP1,257,640 Farnborough Aerospace Centre, Farnborough GU14 6TQ (Leasehold) The Symphony Group, Industrial North West GBP1,080,000 Ickles Way, ROUK Rotherham Properties valued at GBP15 - GBP20 million - New Portfolio Elstree Tower, Standard South East GBP1,320,000 Borehamwood Office Properties valued at GBP10 - GBP15 million - Property Portfolio Denby 242, Denby, Industrial Midlands GBP0 Rent Free, GBP DE5 8NN ROUK 1,153,138 per annum from 15 March 2015 Hertford Place Maple Standard South East GBP1,156,900 Cross Rickmansworth Office St James's House, Standard Midlands GBP862,102 Cheltenham Office 3b-c Michigan Drive Industrial South East GBP712,980 Milton Keynes ROSE Hollywood Green, High Street London GBP787,878 Wood Green, London Retail Bourne House, The Standard South East GBP0 Rent Free, GBP Causeway, Staines Office 696,995 per annum from 15 January 2016 Ocean Trade Centre, Industrial Scotland GBP442,700 Altens Industrial ROUK Estate, Aberdeen Ground Floor, New Standard London GBP546,103 Palace Place, Monck Office and Street, Retail Westminster, London (Leasehold) Howard Town Retail Retail North West GBP677,430 Park, Glossop Warehouse Properties valued at GBP10 - GBP15 million - New Portfolio Charter Court, Bath Standard South East GBP815,448 Road, Slough Office 82-84 Eden Street, Retail Greater GBP200,264 Kingston Upon Thames London Properties valued at GBP5 - GBP10 million - Property Portfolio Tetron 141, Industrial Midlands GBP635,216 Swadlingcote ROUK Explorer 1 & 2, Standard South East GBP701,490 Mitre Court, Crawley Office 1/1A Marsh Way, Industrial Eastern GBP450,000 Fairview Industrial England Park, Rainham, Essex (Leasehold) Tetron 93, Industrial Midlands GBP375,448 Swadlingcote ROUK Dorset Street, Standard South East GBP459,166 Southampton Office Bathgate Retail Retail Scotland GBP478,625 Park, Bathgate Warehouse Unit 6 Broadway Industrial North West GBP854,626 Business Park, Oldham Silbury House, Standard South East GBP373,500 Silbury Boulevard, Office Milton Keynes Units 1&2 Olympian Retail North West GBP380,000 Way, Leyland, Warehouse Preston Halfords, Valley Retail North West GBP515,825 Road, Bradford Warehouse Matalan, Kings Lynne Retail Eastern GBP378,500 Warehouse England Properties valued at GBP5 - GBP10 million - New Portfolio The Quadrangle Standard South West GBP700,000 Cheltenham Office Ceva Logistics Standard East Midlands GBP597,637 Earlstrees Rd Corby Industrial The Kirkgate, Church Standard South East GBP550,000 St Epsom Office Walton Summit Industrial North West GBP590,000 Industrial Estate ROUK Preston Budbrooke Industrial Standard West Midlands GBP476,623 Estate Warwick industrial Swift House, Cosford Industrial West Midlands GBP523,574 Lane Rugby ROUK Foxholes Business Standard South East GBP459,747 Park Hertford Industrial P&O, Whitecliffs Industrial South East GBP479,090 Business Park, Dover ROSE Victoria Shopping Retail West Midlands GBP485,000 Park Hednesford Causeway House Standard South East GBP347,703 Teddington Office Symiths Toys, Middle Retail North East GBP371,138 Engine Lane, North Warehouse Shields The Point Retail Retail North West GBP370,000 Park Rochdale Warehouse Wincanton, Portbury, Industrial South West GBP379,643 Bristol ROUK Foundary Lane Industrial South East GBP125,450 Horsham ROSE Properties valued at GBP0 - GBP5 million - Property Portfolio Endeavour House, Office Park South West GBP415,000 Langford Business Park Kiddlington Interplex 16 Ash Industrial South West GBP192,000 Bridge Rd Bristol ROUK Interfleet House, Office Park East Midlands GBP390,000 Pride Park, Derby The IT Centre, Office Park North East GBP360,624 Innoation Way, York Matalan, Mayo Retail North West GBP318,278 Avenue, Bradford Warehouse Dawson Rd, Mount Standard South East GBP282,758 Farm Milton Keynes Industrial Units 1&2 Deans Ind Standard Scotland GBP405,076 Estate, Cullen Sq Industrial Livingston Persimon House, Office Park South East GBP306,643 Crossways Business Park, Dartford 31/32 Queen Sq, Standard South West GBP160,000 Bristol Office Unit 2 Brunel Way, Standard South East GBP225,000 Segensworth East Industrial Fareham Farrah Unit, Standard South East GBP212,380 Crittall Rd, Witham Industrial Turin Crt Bird Hall Office Park North West GBP340,850 Lane Cheadle Hume Stockport Unit 4 Monkton Industrial North East GBP220,000 Business Park ROUK Hebburn, Newcastle
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Unit 4 Easter Industrial North West GBP184,000 ParkWingates Bolton ROUK 21 Gavin Way Nexus Industrial West Midlands GBP200,250 Point Birmingham ROUK Unit 14 Interlink Industrial East Midlands GBP155,415 Park Bardon ROUK Travis Perkins Standard South West GBP112,000 Cheltenham Industrial 1b Crown Farm, Standard East Midlands GBP60,000 Mansfield Industrial Properties valued at GBP0 - GBP5 million - New Portfolio Broadoak Business Standard North West GBP303,179 Park, Trafford Park, Industrial Manchester Anglia House, Standard South East GBP426,648 Station Road, Office Bishops Stortford The Range, Southend Retail South East GBP303,410 on Sea Warehouse Units 1-4 Opus Way, Standard North West GBP268,035 Warrington Industrial Ceres Court, Standard South East GBP198,712 Kingston Upon Thames Retail (leasehold) 1. Details of the ten largest properties (Combined Portfolio) Set out below is a brief description of the ten largest Properties in the Combined Portfolio. White Bear Yard, Clerkenwell, London Mid Town Office Tenant Lease Term Lease expiry/break Rent review option B&W Group 10 years 13 November 2018 N/A Limited White Bear Yard 5 years 23 June 2019 N/A Management Limited IDEO LLC 10 years 23 June 2019 N/A White Bear Yard 10 years 23 June 2019 N/A Management Limited Current net annual rent GBP527,334 (increasing to GBP1,057,743 on expiry of rent frees) Market Value GBP15-20 million Elstree Tower, Elstree Way, Borehamwood Office South East Tenant Lease Term Lease expiry/break Rent review option Sungard 10 years 24 March 2025 / 24 25 March 2020 Availability March 2020 Services (UK) Ltd Current net annual rent GBP1,320,000 Market Value GBP15-20 million Currys and PC World, Preston Retail Warehouse Tenant Lease Term Lease expiry/break Rent review option DSG 25 years 25 December 2030 25 November 2020 Current net annual rent GBP1,040,895 Market Value GBP15-20 million Chester House, Farnborough Aerospace Centre, Farnborough Office Park Tenant Lease Term Lease expiry/break Rent review option BAE Systems plc 27 years 31 December 2023 10 April 2017 Current net annual rent GBP1,257,640 Market Value GBP15-20 million The Symphony Group, Ickles Way Rotherham Industrial Tenant Lease Term Lease expiry/break Rent review option The Symphony 20 years 15 September 2034 16 September Group plc 2019 Current net annual rent GBP1,080,000 Market Value GBP15-20 million Denby 242, Denby Rd, Denby Industrial Tenant Lease Term Lease expiry/break Rent review option Techno Cargo 15 years 14 March 2025 15 March 2016 Logistics Current net annual rent GBP0 (increasing to GBP 1,153,138 at expiry of rent free) Market Value GBP10-GBP15 million Hertford Place, Rickmansworth Office Tenant Lease Term Lease expiry/break Rent review option Trebor Bassett 20 years 19 December 2022 20 December 2017 Ltd Current net annual rent GBP1,156,900 Market Value GBP10-GBP15 million St James's House, Cheltenham Office Top five tenants Lease Term Lease expiry/break Rent review option BPE Solicitors 12 years 21 March 2024 22 March 2019 LLP Barnett 11 years 29 October 2022 29 October 2019 Waddingham LLP Tangible UK 10 years 6 July 2021/ 7 7 July 2016 Limited July 2016 Local World Ltd 10 years 8 August 2025 / 9 August 2020 8 August 2020 Volo Commerce 10 years 3 March 2024 4 March 2019 Ltd Current net annual rent GBP862,102 Market Value GBP10-GBP15 million Charter Court, 50 Windsor Road, Slough Office Tenant Lease Term Lease expiry/break Rent review option Webloyalty 7 years 22 June 2020 1 March 2015 International Ltd Airwave 13 years 24 December 2021 30 April 2018 Solutions Ltd Webloyalty 7 years 22 June 2020 1 March 2015 International Ltd Current net annual rent GBP815,448 Market Value GBP10-GBP15 million 3 B - C Michigan Drive Milton Keynes Industrial Tenant Lease Term Lease expiry/break Rent review option Bong UK Ltd 12 years 2 January 2026 Annual fixed increases Current net annual rent GBP712,980 Market Value GBP10-GBP15 million 1. Tenant concentration The tenants that contribute in excess of two per cent. of the current net annual rent of the Property Portfolio and the New Portfolio can be summarised as follows: Lease Name Sector Current % of Current net annual net annual rent rent of Property Portfolio Sunguard Availability Office GBP1,320,000 4.1% Services (UK) Ltd BAE Systems Office GBP1,257,640 3.9% Trebor Basset Office GBP1,156,900 3.6% The Symphony Group Plc Industrial GBP1,080,000 3.4% DSG Retail GBP1,040,895 3.3% Warehouse Bong UK Ltd Industrial GBP712,980 2.2% Royal Bank Of Scotland PLC Office GBP700,000 2.2% Matalan Retail GBP696,778 2.2% Warehouse Grant Thornton Office GBP680,371 2.1% Euro Car Parks Ltd Industrial GBP635,216 2.0% 1. Summary of tenure As a percentage of aggregate Market Value Tenure Property New Portfolio Combined Portfolio Portfolio Freehold/ 70.6% 86.1% 76.0% Feuhold Leasehold 29.4% 13.9% 24.0% 1. Lease length The Properties in the Property Portfolio have a total of 113 tenants (excluding car parking spaces, wayleaves and substations). The New Properties in the New Portfolio have a total of 118 tenants. The length of the leases can be summarised as follows: As a percentage of current gross annual rent Lease Property New Portfolio Combined IPD Quarterly Length Portfolio Portfolio Universe* 0-5 years 31.6% 66.4% 34.0% 35% 5-10 years 43.6% 30.9% 37.4% 31% 10-15 17.8% 2.7% 20.2% 15% years 15-20 5.4% 0.0% 4.0% 7% years 20 + years - 0.0% 1.0% 12% % Void (by 2.2% 1.46% 2.0% 6.9% rent) AWULTC 7.1 years 4.4 years 6.2 years 7.45 years *Source: IPD Quarterly Universe (excluding leases over 35 years) 30 June 2015 AWULTC means Average Weighted Unexpired Lease Term Certain (to lease end or break option date if sooner). 1. Income profile (Combined Portfolio) The occurrence of the earlier of lease expiries and break options of the Property Portfolio and the New Portfolio can be summarised as follows: Year of Current gross % of current Cumulative % expiration or annual rent gross annual of current break option rent gross annual rent 2016 GBP2,598,142 8.5% 8.5% 2017 GBP2,290,483 7.5% 16% 2018 GBP2,906,199 9.5% 25.5% 2019 GBP2,552,809 8.3% 33.8% 2020 GBP1,707,521 5.6% 39.4% 2021+ GBP17,448,366 57.0% 100% The aggregate current net annual rent of the Property Portfolio is approximately GBP19.23 million and the aggregated estimated net annual rental value is approximately GBP22.04 million. The aggregate current net annual rent of the New Portfolio is approximately GBP 10.81 million and the aggregated estimated net annual rental value is approximately GBP11.81 million. 1. Covenants The covenant strength of the tenants of the Properties and the New Properties can be summarised as follows: As a percentage of current gross annual rent
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November 13, 2015 04:00 ET (09:00 GMT)
Covenant Property New Portfolio Combined IPD Quarterly Strength Portfolio Portfolio Universe* Negligible & 61% 58% 58% 57% Government risk Low risk 15% 24% 18% 21% Low-medium 10% 2% 7% 6% risk Medium-high 8% 4% 6% 2% risk High risk 3% 2% 3% 4% Maximum risk 2% 1% 1% 6% Unscored 0% 8% 3% 2% Administration 0% 1% 0% 0% * Source: IPD Quarterly Universe ** Based on D&B Risk of Failure 1. Lease terms The occupational leases of the Properties and the New Properties are on terms which could reasonably be expected for properties of the type comprised in the Property Portfolio and the New Portfolio. Subject to the above and viewing the Property Portfolio and New Portfolio as a whole, the occupational leases of the Properties in the Property Portfolio and the New Properties in the New Portfolio are in general terms institutionally acceptable. 1. Property condition Independent building surveys, mechanical and electrical surveys and environmental surveys have been undertaken for each of the Properties and the New Properties. These have been reviewed by the Investment Manager and it is considered that the condition of the Properties and the New Properties is acceptable having regard to the properties' age, use, type and lease terms. 1. Regional weightings The regional weightings of the Property Portfolio, the New Portfolio and the Combined Portfolio can be summarised as follows: As a percentage of current gross annual rent Region Property New Portfolio Combined IPD Quarterly Portfolio Portfolio Universe* London 3% 0.0% 2% 15.2% West End London 7% 0.0% 4.3% 4.9% City East 5.1% 10.5% 14.2% 10.5% Midlands South East 36% 55% 43% 33.6% South West 8% 9% 8% 6.5% West 1% 19% 4% 6.6% Midlands North East 10% 3% 8% 2% North West 11% 14% 12% 12% Scotland 7% 0.0% 4% 5.5% * Source: IPD Quarterly Universe 1. Sectoral weightings The sectoral weightings of the Property Portfolio, the New Portfolio and the Combined Portfolio can be summarised as follows: As a percentage of current gross annual rent Sector Property New Portfolio Combined IPD Quarterly Portfolio Portfolio Universe* Retail 21% 21% 21% 42.6% Office 42% 37% 40% 29.8% Industrial 37% 41% 39% 18.4% Other 0% 0% 0% 9.2% * Source: IPD Quarterly Universe 1. Sub-sector weightings The sub-sector weightings of the Property Portfolio, the New Portfolio and the Combined Portfolio can be summarised as follows: As a percentage of current gross annual rent Region Property New Combined IPD Quarterly Portfolio Portfolio Portfolio Universe* South East Standard 5.4% 8.3% 7.6% 9.7% Retail Rest of UK Standard 0% 0% 0% 7.1% Retail Shopping Centres 0% 0% 0% 9.1% Retail Warehouses 15.4% 13.6% 14.5% 16.7% Central London 10.0% 0.0% 6.5% 15.2% Offices South East Offices 22.5% 31% 19.1% 9.5% Rest of UK Offices 9.3% 6.2% 8.2% 5.1% South East 9.8% 13.1% 12.1% 10.8% Industrial Rest of UK 27.6% 27.8% 31.9% 7.6% Industrial Other 0% 0.0% 0% 9.2% * Source: IPD Quarterly Universe 12. Disposals from the Property Portfolio Since 30 September 2015, the Company has completed the sale of the Maple Cross Property for a consideration of GBP14.75 million. As at 30 September 2015, the market value of the Maple Cross Property was GBP14 million. This sale completed on 6 November 2015. APPENDIX II DEFINITIONS The meanings of the following terms shall apply throughout this document unless the context otherwise requires. Acquisition the acquisition of all of the units in the JPUT, the two ordinary shares in the General Partner and the New Portfolio by the Group Acquisition Agreement the sale and purchase agreement relating to all the units in the JPUT and the entire issued share capital of the General Partner dated 12 November 2015 Admission the admission of the New Shares to the Official List and to trading on the Main Market pursuant to the Initial Placing and Offer Admission Condition (i) the UKLA having acknowledged to the Company or its agent (and such acknowledgement not having been withdrawn) that the application for the admission of the New Shares arising under the Issues, as the case may be, to the Official List with a premium listing has been approved and (after satisfaction of any conditions to which such approval is expressed to be subject ("listing conditions")) will become effective as soon as a dealing notice has been issued by the FCA and any listing conditions having been satisfied and (ii) the London Stock Exchange having acknowledged to the Company or its agent (and such acknowledgement not having been withdrawn) that the New Shares will be admitted to trading Application Form the application form which accompanies this document for use in connection with the Offer Bank The Royal Bank of Scotland plc, a company incorporated in Scotland with registered number SC090312 Bank Facility the GBP84,432,692 term loan facility provided to the Company by the Bank pursuant to the Facility Agreement Board or Directors the directors of the Company Circular the circular to be published in connection with the Proposals Combined Portfolio the Property Portfolio and the New Portfolio Company Standard Life Investments Property Income Trust Limited, a company incorporated in Guernsey with registered number 41352 Combined Portfolio the Property Portfolio and the New Portfolio Estimated Net Annual Rent is based on the current rental value of a property: (i) ignoring any special receipts or deductions arising from the property; (ii) excluding Value Added Tax and before taxation (including tax on profits and any allowances for interest on capital or loans); (iii) after making deductions for superior rents (but not for amortisation), and any disbursements including, if appropriate, expenses of managing the property and allowances to maintain it in a condition to command its rent; and (iv) where a property, or part of it, is let at the date of valuation, the rental value reflects the terms of the lease, and, where a property, or part of it, is vacant at the date of valuation, the rental value reflects the rent the Valuer considers would be obtainable on an open market letting as at the valuation date Facility Agreement the facility agreement in relation to the Bank Facility between, among others, the Bank in various capacities and the Company and the Property Subsidiary, originally dated 22 December 2011, as amended by first and second amendment agreements both dated 19 December 2014 FCA the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part IV of FSMA, or any successor authority FSMA the Financial Services and Markets Act 2000, as amended General Meeting the general meeting of the Company to be held at 30 St Mary Axe, London EC3A 8EP at 10 a.m. on 11 December 2015 to approve the issue of New Shares pursuant to the Initial Placing and Offer and the Acquisition General Partner Aviva Investors UK Real Estate Recovery II (General Partner) Limited
(MORE TO FOLLOW) Dow Jones Newswires
November 13, 2015 04:00 ET (09:00 GMT)
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