Axa Property Share Discussion Threads

[zastas] 27/1/2012 17:44

What looked like one of the safer, less-geared property trusts is now going down again. More through luck than anything else I sold at least in late 2009, at about 56 I remember, although it carried on to 60 after that.

It was for sale at 18 pence in dec 2008: will it get there again?

Yes, a lower Euro and property out of favour, refinancing worries etc all have something to offer. But having looked once more at the accounts Oct 2011, it's obvious why this deserves such a pummelling. For starters, its dividend has been announced to be cut/suspended.

Firstly, in common with so many other trusts, it seems disproportionately run for the benefit of its board and highly paid employees. Just like the Conygar saga. And many others, such as JRIC. I notice that here the board owns again hardly any shares; its commitment is only worth about 10k ! Secondly, despite recording losses, it continues to award itself fees/salaries. It's Investment Fee does not seem to have fallen despite the reported losses per share.

Dissecting the accounts it's clear the running costs and charges are again disproportionately high, especially if you run property yourself, even as a BTLr.

There's a gross income of about 12.5M. But then 2M property running costs. Then 1.4 investment fee but again about 1.4 admin charge. So together 5 million of the 12.5 income goes to those who run it, before finance charges. That's 40% ! Interest rates remain low, but even then they already pay 2.5M; it sems they will need God's help when IR normalises! Then barely 2-3 Million will be earned and all hope will rest on NAV increases, not much room left.

The costs are just far too high. Anyone who has enough readies to buy some property outright, will do better, especially with just about 50% gearing.

[skyship] 27/1/2012 14:43

That RNS anticipated for IFD duly arrived and the dividend duly retained. There remain just two and a half days to buy IFD before they go ex the latest 0.88p dividend (announced earlier this week):

"The dividend payment will be made on 17 February 2012 to shareholders on the register on 3 February 2012. The ex-dividend date will be 1 February 2012."

If you BUY @ 33.0p (currently on offer @ 32.967p online) you do so at a 10.66% yield and on a 41% EPRA NAV discount.

An unpopular sector for sure; but IFD has to be one of the cheapest stocks on the LSE.

I've added a few IFD again today...and keeping some powder dry for eventually buying APT - they are approaching BUY territory - but not yet...

[skyship] 23/1/2012 17:22

djb - as I posted above - "Better value elsewhere..." - though I
hadn't envisaged a further 10% fall quite so quickly!

In that time PCTN has risen 10%; but IFD so far hasn't moved a jot...

So. Still sell these & BUY IFD @ 33p ahead of the NAV/Divi IMS due
later this week; or at this level, retain & BUY IFD.

[djderry] 23/1/2012 16:54

This is beginning to feel like death by a thousand cuts.

[skyship] 21/12/2011 15:55

Problem here is obviously the collapsing Euro - see last IMS extract below
==================================================
"The sterling valuation of the property portfolio decreased to GBP139.0 million (including the effects of foreign exchange movements and capital expenditure) (30/06/2011: GBP145.98 million). The GBP/EUR foreign exchange rate applied to the Company's Euro investments in its subsidiary companies at 30 September 2011 was 1.167 (30 June 2011: 1.1073).
==================================================

The Set'11 NAV of 67.9p will have reduced to 64.9p just on the further forex loss, yet alone any additional minor weakness in valuations.

Better value elsewhere for the timebeing. The two Best Buys may be:

# PCTN for a yield of 10.8% and an NAV discount of 40% @ 36.5p. LTV = c46%

# IFD for a yield of 10.7% and an NAV discount of 30% @ 33.0p. LTV = c42%

I prefer the latter as they have no refinancing need until July 2014, whereas PCTN have to refinance no later than Jan'13. Also IFD have many active management initiatives through which planning gains and asset sales will increase the NAV throughout 2012.

Well worth reading through the volumes of property initiatives detailed with the Interim Report just last month; and also with the August Finals - a good place to start being the Analyst Presentation under the Investor Relations section on the company website:

[puku] 11/11/2011 12:58

when they announced their NAV in Aug they did say the divs would be reduced for 2 quarters. so we were warned

[djderry] 02/11/2011 22:55

Thanks skyship,I own a few PSPI for their dividend but will take a look at the co. you mention,thanks again.

[skyship] 26/10/2011 13:21

djderry - take a look at PCTN - just confirmed their qtly 1.0p divi. I bought a few this morning @ 40.375p, but still offered @ 40.5p for a 9.9% yield:

[djderry] 24/10/2011 17:41

Dividend to be materially reduced for next two quarters,not happy as I own these mainly for divis.

[davebowler] 23/8/2011 11:58

Respectable results;

[davebowler] 04/7/2011 10:40

Date: 04 July 2011



AXA Property Trust completes portfolio refinancing



The Board is pleased to announce that on 28 June 2011 the facility agreement for the refinancing of the Main Facility with Credit Agricole Corporate and Investment Bank and Credit Foncier de France was executed. Details are as follows:



Total amount €75,759,750

Loan to Value on banks valuation 55%

Loan to Value test after one year 50%

Expiry Date 1 July 2016

Margin 2.40%

Arrangement Fee 1.00%

Amortisation: None

All-in rate excluding costs 4.89%



The Directors and the Manager are confident the Company continues to have sufficient cash and income to meet all costs of the refinancing, and maintain the current level of dividend.



The completion of this refinancing will further enable the Company to focus on enhancing portfolio value, whilst re-positioning the asset base through disposals of non-value adding properties. A plan is being implemented to achieve these objectives, and to ensure compliance with the future LTV test of 50% on 1 July 2012.

[sleepy] 09/6/2011 14:42

SKYSHIP - thank you for flagging this. What do you think about the LTV which appears to be at the maximum allowed by its banking covenants?

[skyship] 08/6/2011 17:13

As Kenny pointed out on the CP+ thread, these went XD on 11 May 2011; Payment Date - 27 May 2011.

[skyship] 08/6/2011 12:46

APT are now getting back to good value IMO, so have bought my first tranche of 15k @ 50.15p cum-divi. Will be looking to add...

[davebowler] 25/5/2011 10:45

From the report............The Company's net property yield on current market valuation (after acquisition and operating costs) as at 31 March 2011 was 6.88% (6.74% as at 31 December 2010).

[davebowler] 25/5/2011 10:43

RNS Number : 8670G

Axa Property Trust Ld

19 May 2011

To: Company Announcements

Date: 19 May 2011

Company: AXA Property Trust Limited

Subject: Interim Management Statement

CORPORATE SUMMARY

- The interim dividend of 0.75 pence per share in respect of the quarter ending 31 March 2011 was declared on 5 May 2011 and is due for payment on 27 May 2011;

- The Company's unaudited Consolidated Net Asset Value at 31 March 2011 was GBP74.06 million (74.06 pence per share) (GBP73.52 million (73.52 pence per share) as at 31 December 2010), an increase of GBP0.54 million;

- As the Porto Kali portfolio of Dutch office buildings continues to experience adverse market conditions, the estimated recoverable value of the Company's remaining investment (in the form of a loan to the Porto Kali vehicle) has been written down to GBPnil as at 31 March 2011;

- Further to the RNS on 1 April announcing the withdrawal of LBB and the agreement to a 3 month extension to the existing loan facility, the Company has entered into a new Term Sheet with Credit Agricole CIB and a new co-lender, Credit Foncier, to refinance the current facility on a pari passu basis;

- Construction works for the new Edeka unit at Fuerth are being completed and are on schedule for the handover which is expected to take place on 27 May 2011. A number of retailers are being targeted as potential tenants for the unit to be vacated by Edeka. Terms have been agreed with C&A to take an enlarged unit on a new 10 year lease;

- Following the signing of a 15 year lease at Koethen, the tenant, a franchisee of national DIY retailer Hagebau, is proceeding with fit out works and the unit is expected to open to the public by the end of May.

STRATEGY AND MARKET

Country Allocation at 31 March 2011

Country % of portfolio

Germany 59%

Netherlands 20%

Italy 17%

Belgium 4%

Sector Allocation 31 March 2011

Sector % of portfolio

Retail 58%

Industrial 20%

Office 13%

Leisure 9%

Following the successful letting at Koethen, the Investment Manager's focus remains on increasing rental income, particularly at Fuerth. The portfolio's income is well secured against strong tenant covenants and a tenant base that is weighted towards the defensive food retail sector.

The development of the new Edeka unit in Fuerth is in its final stages and delivery is now scheduled for 27 May 2011, following minor re-configuration requests by Edeka. Negotiations with Fressnapf, a national pet food retailer, to occupy the majority of the unit currently occupied by Edeka, have ended. A number of retailers are being targeted to potentially take part or all of the unit.

ROFU, an existing tenant, has moved to the unit previously occupied by Pfennig-Pfeiffer (1,175m(2)) after signing a new 10 year lease. An agreement has been reached with C&A to take over the former ROFU unit together with an additional 205m(2). A new 10 year lease has been agreed.

Three other existing smaller tenants have agreed to 5 year lease extensions.

At Koethen, following the signing of a 15 year lease with a franchisee of the national DIY retailer Hagebau, the tenant has started their fit out works. These works are expected to be completed by the end of May in time for the opening of the store to the public.

In February 2011, Deutsch Bahn Schenker (a leading European logistics operator), the main tenant at Dasing, exercised their option to prolong their lease on halls one to four (7,294m(2)) until June 2012, at the same rental level. In return the Manager has agreed to grant two months rent free. Further negotiations have commenced with the tenant to extend their lease until 2014.The tenant has verbally agreed in exchange for a light refurbishment of their social area. The costs of these works are currently being analysed. This two year extension will be a significant result for the Company taking into consideration the high vacancy in the area.

OUTLOOK

With limited rental value growth at the prime end of the market, it will generally take two or more years before it starts to trickle down to the more standard properties, and this is compounded by investors remaining risk averse towards assets that carry increased risk of tenant default. The investor demand will remain firmly focussed on income, therefore. And growth will be a secondary consideration in almost all markets.

The ECB has already started to raise official interest rates and we expect that process to continue during 2011 and 2012. This is despite the fragile nature of the economic recoveries in Europe (burdened as they are by austerity programmes), and it will have a particularly adverse effect on the real estate market in terms of the cost of debt capital and upward pressure on investment yields.

Within that cautious outlook, Germanys' economy is moving forward positively, and it should - within the next six months - be back to its pre-recession output peak. With the effect of increased vacancy levels, it will take some time before this translates into net new demand for property, but investors are starting to target the property markets in anticipation.

The Fund's strong income profile, exposure to Germany and conservative LTV should continue to produce positive results. Capital values are expected to remain stable, with increases occurring as a result of the successful implementation of identified asset management initiatives

[davebowler] 09/5/2011 13:48

.....'Germany experienced the sharpest rise'

[davebowler] 22/10/2010 15:50

From the Annual Fiancial Report;
The long-term potential for the Company remains sound, and we believe there are now more reasons to be confident of its more medium-term prospects than there have been for some time:

- appraised and realisable property market values are more likely to increase than hitherto;

- with the benefit of the Investment Managers' strong on-the-ground presence they are able to enhance stock values and income flow;

- the Company's pre-let extension and rebuilding of its retail park at Fuerth in Bavaria, Germany, is under construction and it will almost certainly lead to enhanced capital and rental values at completion next year;

- with the heads of terms now agreed on the refinancing, the Board believes the capital funding of the Company will be secured, providing a strong basis for growth, and cash flow will be enhanced supporting future dividend payments.



While being alert to opportunities internally and in markets, above all the Company remains conservative in both its investment approach and its financial management.

[davebowler] 02/9/2010 09:50

CORPORATE SUMMARY
- The Company's unaudited Consolidated Net Asset Value at 30 June 2010 was
GBP78.01 million (78.01 pence per share);
- The fourth interim dividend of 0.75 pence per share in respect of the year
ending 30 June 2010 was declared on 5 August 2010 and is due for payment on 27
August 2010;
- Documentation regarding the waiver of the existing Loan to Value breach of
the loan facility with Credit Agricole (announced in the most recent Interim
Management Statement RNS dated 19 May 2010) has now been completed and the loan
facility is no longer in breach of any covenants ;
- With the waiver finalised, discussions have advanced on the refinancing
with the main activity revolving around due diligence and site visits by
prospective lenders;
- A new currency hedging strategy is in place in order to (i) more closely
match the foreign currency exposures of the fund with short term instruments,
(ii) allow the Company to be more proactive if exchange rates remain volatile
and (iii) ease the refinancing of the main loan facility;
- Planned construction works have commenced at Fuerth to provide a new Edeka
supermarket with completion due early 2011.


CONSOLIDATED PERFORMANCE SUMMARY (UNAUDITED)

+--------------------+-----------+------------+------------+
| | Unaudited | Unaudited | |
+--------------------+-----------+------------+------------+
| | 9 months | 12 months | |
| | ended | ended | |
+--------------------+-----------+------------+------------+
| | 31 March | 30 June | Quarterly |
| | 2010 | 2010 | Movement |
+--------------------+-----------+------------+------------+
| | Pence per | Pence per | Pence |
| | share | share | per |
| | | | share |
| | | | /(%) |
+--------------------+-----------+------------+------------+
| Net Asset Value | 78.49 | 78.01 | -0.48 |
| per share | | | (-0.61%) |
+--------------------+-----------+------------+------------+
| Earnings per share | -8.77 | -1.07 | +7.70 |
+--------------------+-----------+------------+------------+
| Dividend declared | 2.25 | 3.00 | +0.75 |
| in the period | | | |
+--------------------+-----------+------------+------------+
| Share price (mid | 50.5 | 46.5 | -4.0 |
| market) | | | (-7.92%) |
+--------------------+-----------+------------+------------+
| Share price | 35.7% | 40.4% | +4.7 |
| discount to Net | | | percentage |
| Asset Value | | | pts |
+--------------------+-----------+------------+------------+


+----------------------+------------+------------+
| Total return | Unaudited | Unaudited |
+----------------------+------------+------------+
| | 9 months | 12 months |
| | ended | ended |
+----------------------+------------+------------+
| | 31 March | 30 June |
| | 2010 | 2010 |
+----------------------+------------+------------+
| Net Asset Value | -3.3% | -3.0% |
| Total Return | | |
+----------------------+------------+------------+
| Share price Total | | |
| Return | | |
+----------------------+------------+------------+
| - AXA Property Trust | 30.1% | 21.6% |
+----------------------+------------+------------+
| - FTSE All Share | 37.4% | 21.1% |
| Index | | |
+----------------------+------------+------------+
| - FTSE Real Estate | 35.3% | 18.0% |
| Investment Trust | | |
| Index* | | |
+----------------------+------------+------------+
*FTSE Real Estate Index is not available
Source: Datastream; AXA Real Estate


Total net profit was GBP7.70 million (7.70 pence per share) for the three months
to 30 June 2010, including GBP1.22 million of "revenue" profit (excluding
capital items such as revaluation of property) and GBP6.48 million "capital"
profit analysed as follows:




+------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Unaudited |
+------------------------+------------+------------+------------+
| | 9 months | 12 | 3 months |
| | ended | months | ended |
| | | ended | |
+------------------------+------------+------------+------------+
| | 31 March | 30 June | 30 June |
| | 2010 | 2010 | 2010 |
+------------------------+------------+------------+------------+
| | GBPmillion | GBPmillion | GBPmillion |
+------------------------+------------+------------+------------+
| Net property income | 8.83 | 11.60 | 2.77 |
| | | | |
+------------------------+------------+------------+------------+
| Net foreign exchange | -0.94 | -0.66 | 0.28 |
| (losses)/gains | | | |
+------------------------+------------+------------+------------+
| Investment Manager's | -1.01 | -1.35 | -0.34 |
| fees | | | |
+------------------------+------------+------------+------------+
| Other income and | -1.09 | -1.46 | -0.37 |
| expenses | | | |
+------------------------+------------+------------+------------+
| Net finance costs | -2.97 | -3.98 | -1.01 |
| | | | |
+------------------------+------------+------------+------------+
| Current tax | -0.47 | -0.58 | -0.11 |
| | | | |
+------------------------+------------+------------+------------+
| Revenue profit | 2.35 | 3.57 | 1.22 |
+------------------------+------------+------------+------------+
| | | | |
+------------------------+------------+------------+------------+
| Unrealised losses on | -7.76 | -9.39 | -1.63 |
| revaluation of | | | |
| property | | | |
+------------------------+------------+------------+------------+
| Unrealised | 0.86 | -0.55 | -1.41 |
| gains/(losses) on | | | |
| revaluation of Porto | | | |
| Kali investment (loan | | | |
| receivable) | | | |
+------------------------+------------+------------+------------+
| Unrealised | -3.94 | 5.83 | 9.77 |
| (losses)/gains on | | | |
| derivatives (hedging | | | |
| interest rate and | | | |
| foreign exchange | | | |
| exposures) | | | |
+------------------------+------------+------------+------------+
| Net foreign exchange | 0.01 | -0.10 | -0.11 |
| gains/(losses) | | | |
+------------------------+------------+------------+------------+
| Deferred tax | -0.29 | -0.43 | -0.14 |
| | | | |
+------------------------+------------+------------+------------+
| Capital (loss)/profit | -11.12 | -4.64 | 6.48 |
+------------------------+------------+------------+------------+
| | | | |
+------------------------+------------+------------+------------+
| Total net | -8.77 | -1.07 | 7.70 |
| (loss)/profit | | | |
+------------------------+------------+------------+------------+



NET ASSET VALUE

The unaudited Company's Consolidated Net Asset Value per share of AXA Property
Trust Limited (the "Company") as at 30 June 2010 was 78.01 pence (78.49 pence as
at 31 March 2010).

The Net Asset Value attributable to the Ordinary Shares is calculated under
International Financial Reporting Standards. It includes all current year income
and is calculated after the deduction of dividends paid prior to 30 June 2010,
but does not include provision for the quarterly interim dividend of 0.75 pence
per share announced on 5 August 2010 and to be paid on 27 August 2010.

The GBP0.48 million decrease in Net Asset Value over the quarter ended 30 June
2010 can be analysed as follows:

+------------------------------+------------+------------+
| | Unaudited | Unaudited |
+------------------------------+------------+------------+
| | 12 | 3 months |
| | months | |
+------------------------------+------------+------------+
| | GBPmillion | GBPmillion |
+------------------------------+------------+------------+
| Opening Net Asset Value | 1 July | 1 April |
| | 2009 | 2010 |
+------------------------------+------------+------------+
| | 83.46 | 78.49 |
+------------------------------+------------+------------+
| Net (loss)/profit | -1.07 | 7.70 |
+------------------------------+------------+------------+
| Unrealised gains on | 2.05 | 0.46 |
| derivatives | | |
+------------------------------+------------+------------+
| Dividends paid | -3.00 | -0.75 |
| | | |
+------------------------------+------------+------------+
| Foreign exchange | -3.43 | -7.89 |
| translation losses | | |
+------------------------------+------------+------------+
| Closing Net Asset Value 30 | 78.01 | 78.01 |
| June 2010 | | |
+------------------------------+------------+------------+

During the quarter, the portfolio valuation declined by GBP1.28 million (EUR1.57
million) (0.96 %). Taking account of foreign exchange movements in addition to
this fall the sterling valuation of the property portfolio decreased by GBP13.29
million (9.1%) to GBP132.95 million.

The Company's net property yield on current market valuation (after acquisition
and operating costs) as at 30 June 2010 was 7.50% (7.52% as at 31 March 2010).



SHARE PRICE AND DISCOUNT TO NET ASSET VALUE

As at close of business on 30 June 2010, the mid market price of the Company's
shares on the London Stock Exchange was 46.5 pence, representing a discount of
40.4% on the Company's Net Asset Value at 30 June 2010 and a 6.5% annual
dividend yield.

As at close of business on 17 August 2010, the mid market price of the Company's
shares was 49.50 pence, representing a discount of 36.5% on the Company's Net
Asset Value at 30 June 2010 and a 6.1% annual dividend yield.





DIVIDENDS
The fourth interim dividend of 0.75 pence per share in respect of the year
ending 30 June 2010 was declared on 5 August 2010, with an ex-dividend date of
11 August 2010, record date of 13 August 2010 and payment date of 27 August
2010. The cumulative interim dividends of GBP3.00 million declared in respect of
the 12 months period ended 30 June 2010 were 119% covered by "revenue" profits
and 134% covered by operating cash flow (excluding capital expenditure and
foreign exchange).

STRATEGY AND MARKET

Country Allocation at 30 June 2010

Country % of portfolio
Germany 60%
Netherlands 19%
Italy 17%
Belgium 4%


Sector Allocation 30 June 2010

Sector % of portfolio
Retail 58%
Industrial 18%
Office 15%
Leisure 9%


AXA Real Estate, the Company's Real Estate Adviser, anticipates that while there
remains downward pressure on rents in occupational markets, this is expected to
have largely come to an end by mid-2011.

The portfolio's income stream is well secured against strong tenant covenants
and a tenant base that is weighted towards the defensive food retail sector
maintaining a low vacancy rate. The focus on rental income, comprehensive
management of tenants, leases and the physical assets remain a priority for the
portfolio.

The Investment Manager continues to monitor the markets with a view to
undertaking a measure of geographic re-allocation of assets. As a first stage in
the process one property is currently under offer for sale in Germany.

FUND GEARING

+--------------------------+------------+------------+--------------+
| | Unaudited | Unaudited | |
+--------------------------+------------+------------+--------------+
| | 31 March | 30 June | Movement |
| | 2010 | 2010 | |
+--------------------------+------------+------------+--------------+
| | GBPmillion | GBPmillion | GBPmillion |
| | /% | /% | /% |
+--------------------------+------------+------------+--------------+
| Property portfolio | 146.25 | 132.95 | -13.3 |
| | | | (-9.1%) |
+--------------------------+------------+------------+--------------+
| Borrowings | 78.20 | 71.52 | -6.68 |
| | | | (-8.5%) |
+--------------------------+------------+------------+--------------+
| Total gross gearing | 53.5% | 53.8% | +0.3 |
| excluding Porto Kali | | | percentage |
| | | | pts |
+--------------------------+------------+------------+--------------+
| Total net gearing | 41.4% | 42.3% | +0.9 |
| excluding Porto Kali | | | percentage |
| | | | pts |
+--------------------------+------------+------------+--------------+
| Total gross gearing | 56.6% | 57.2% | +0.6 |
| including Porto Kali | | | percentage |
| | | | pts |
+--------------------------+------------+------------+--------------+
Fund gearing increased by 0.3 percentage points over the quarter to 53.8% as at
30 June 2010.
Fund gearing is included to provide an indication of the overall indebtedness of
the Company and does not relate to any covenant terms in the Company's loan
facilities. Gross gearing is calculated as debt over property portfolio at fair
value. Net gearing is calculated as debt less cash over property portfolio at
fair value.


LOAN FACILITIES

+-------------------------------+-----------+-----------+---------+
| Gross Loan to Value Covenants | Unaudited | Unaudited | |
+-------------------------------+-----------+-----------+---------+
| | 31 March | 30 June | Maximum |
| | 2010 | 2010 | |
+-------------------------------+-----------+-----------+---------+
| Main loan facility | 53.1% | 53.5% | 55.0% |
+-------------------------------+-----------+-----------+---------+
| Joint venture Property Trust | 57.1% | 58.8% | 65.0% |
| Agnadello S.r.l. | | | |
+-------------------------------+-----------+-----------+---------+
| Consortium investment Porto | 74.6% | 77.5% | 80.0% |
| Kali | | | |
+-------------------------------+-----------+-----------+---------+

+--------------------------+-----------+-----------+-----------+-----------+
| | Unaudited | Unaudited | Unaudited | Unaudited |
+--------------------------+-----------+-----------+-----------+-----------+
| Interest Cover Ratio at | Historic | Minimum | Projected | Gross |
| 30 June 2010 | | | | rental |
| | | | | income |
| | | | | headroom |
+--------------------------+-----------+-----------+-----------+-----------+
| Main loan facility | 315.0% | 250.0% | 655.7% | 61.9% |
| covenant | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
| Joint venture Property | 371.5% | 125.0% | 494.1% | 74.7% |
| Trust Agnadello S.r.l. | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
| Consortium investment | 197.0% | 120.0% | 329.0% | 52.0% |
| Porto Kali | | | | |
+--------------------------+-----------+-----------+-----------+-----------+

Interest Cover Ratio (ICR) is calculated as net financing expense payable as a
percentage of gross rental income (or in the case of Property Trust Agnadello,
net rental income) less movement in arrears. Projected net financing expense
payable assumes prevailing floating interest rates for the majority of the year.
Gross rental income headroom is based on projected interest cover.


MAIN LOAN FACILITY

Having finalised the waiver the Investment Manager has stepped-up negotiations
with potential lenders in respect of a full refinancing of the loan facility.
Prospective lenders are at differing stages in their credit approval processes
and are currently undertaking due diligence and site visits. It is expected to
achieve full credit approval with preferred banks during September. The board
continuesto review and monitor progress on the planned refinancing closely.

The Company's loans with Credit Agricole have been fully hedged at an average
rate of 5.21% via interest rate swaps which matured during July 2010 and are now
hedged via interest rate caps at a strike rate of 4.50% until April 2011 when
the loan facility expires.


FOREIGN CURRENCY HEDGE OF NET INVESTMENT (FRA)

The Board, following advice from the Investment Manager, has approved a new
hedging strategy which more closely offsets short term foreign currency
fluctuations, matches the net assets exposed to foreign currency and allows the
Company to be more proactive if exchange rates remain volatile. This new
strategy will be implemented through the use of derivatives with maturities of
between three months and twelve months with a nominal value approximate to the
Company's net asset value.

The further benefit of this new hedging strategy will be to smooth the
continuing refinancing negotiations to ensure its successful completion due to
the less onerous security required for shorter term instruments.

As such, on 12 August 2010, the Investment Manager closed out two of the
original three FRAs in place with Credit Agricole for a total face value of EUR80
million of the total EUR120 million. The cash impact of closing these two trades
was EUR633,000 in favour of the bank and this was met from the Company's cash
resources. The trades are NAV neutral as the cash outflow of EUR633,000
extinguishes the liability of the same value. The third FRA is planned to be
closed in the coming weeks.


CAPITAL EXPENDITURE AND CASH POSITION
The Company and its subsidiaries held total cash of GBP15.47 million (EUR18.90
million) at 30 June 2010 (31 March 2010: GBP17.56, EUR19.68). The decrease in cash
over the quarter to 30 June 2010 is mainly due to the weakening of the Euro
against Sterling and some capital expenditure. GBP9.95 million (EUR12.16 million)
cash is held on short term deposit to be realised as required for the capital
expenditure programme and other cash requirements including GBP4.30 million
(EUR4.8 million) committed for the development of the Company's retail asset in
Fuerth.


OUTLOOK

The portfolio's income stream remains well protected with a low vacancy rate of
2.6% in respect to the directly held portfolio. AXA Real Estate in-territory
asset management teams are currently in the process of renewing lease contracts
with several tenants where leases are due to expire in 2011. Although rental
values are coming under pressure across Europe, rents paid in particular by
German supermarkets, an important sub-sector for the Company, are expected to
remain stable or decline only marginally in the coming year. In addition to the
development project at Fuerth, limited and highly targeted landlord investment
is budgeted to facilitate letting and renewal projects where improved value can
be captured. Expenditure is only undertaken once a new lease has been signed.

We believe that investment yields are now stabilising following significant
re-pricing across the continent. With strong property fundamentals and a
conservative financing approach, we are confident that the Company remains well
positioned as European economies emerge from recession. In the new market
environment which is emerging the Investment Manager, supported by AXA Real
Estate local teams across Europe, plan to dispose of selected properties from
its German portfolio. Proceeds will be reinvested in territories where the
Investment Manager sees value growth potential.

[davebowler] 19/5/2010 13:27

See the last part of the article from Investment Week;

Heavy discounts prompt Coombs to boost IT holdings for Rathbone

17 May 2010 | 08:00
David Whittam

Categories: Investment Trusts

Tags: Global growth | Rathbone

David Coombs has boosted the investment trust holdings within his Rathbone Strategic Growth Portfolio as discounts to net asset value have narrowed.

The £26.5m fund of funds, which Rathbones recently opened to external investors, now has 17.3% in investment trusts, up 4% since the start of the year.




The manager has shifted emphasis from listed hedge funds to listed equity and property funds.
Coombs says: "We have used investment trusts this year because they have been at big discounts to NAV, but last year we did not hold much.

"Investment trusts are particularly appropriate for asset classes that suffer from periods of illiquidity, which is usually when they are under stress. This can be particularly unhelpful for open ended funds, which find themselves forced sellers.

"A trust's manager is not a forced seller, because they have permanent capital."

Coombs sets no predefined limits for fund categories, and says he could buy more investment trusts if discounts widen outside normal trading ranges.

His recent purchases include Schroder UK, Edinburgh Investment Trust, and Melchior Japan.

"I have also added to other trusts on big discounts in property and private equity," he says.

Coombs bought the £49m Axa Property Trust at a 35% discount to NAV, which has not yet narrowed. The manager says this is unjustified.

"Any refinancing package will bring certainty and up the rating, as it is the strongest player in the sector."

[davebowler] 19/5/2010 10:16

In profit now on the Exchange rate derivatives;


Subject: Interim Management Statement 31 March 2010





CORPORATE SUMMARY

- Documentation regarding the waiver of the existing Loan to Value breach of the loan facility with Credit Agricole has now been agreed. Main terms of the waiver are included in the statement;

- With the waiver finalised, discussions are now re-focussed on refinancing as soon as possible, with the main activity revolving around the current negative mark to market value of the long term forward rate hedging agreements.;

- Net asset value rises by 3.1% for the quarter to end March 2010;

- The third cash covered interim dividend of 0.75p due for payment on 28 May 2010;

- Asset management initiative continues in Fuerth, Germany as planned and lettings and lease renewals continue at Dasing, Koethen and Bernau;

- The investment manager is undertaking a strategic review of the portfolio allocation, with a particular focus on the significant exposure to Germany.





CONSOLIDATED PERFORMANCE SUMMARY (UNAUDITED)






Unaudited


Unaudited






6 months ended


9 months ended






31 December 2009


31 March 2010


Quarterly Movement




Pence per share


Pence per share


Pence per share /(%)

Net Asset Value per share


76.13


78.49


+2.36 (+3.1%)

Earnings per share


-10.65


-8.77


1.88

Dividend declared in the period


1.50


2.25


0.75

Share price (mid market)


53.0


50.5


-2.5 (-4.72%)

Share price discount to Net Asset Value


30.4%


35.7%


+5.3 percentage pts





Total return


Unaudited


Unaudited




6 months ended


9 months ended




31 December 2009


31 March 2010

Net Asset Value Total Return


-7.0%


-3.3%

Share price Total Return






- AXA Property Trust


34.7%


30.1%

- FTSE All Share Index


29.1%


37.4%

- FTSE Real Estate Investment Trust Index*


36.3%


35.3%

*FTSE Real Estate Index is not available

Source: Datastream; AXA Real Estate



Total net profit was £1.88 million (1.88 pence per share) for the three months to 31 March 2010, including £0.84 million of "revenue" profit (excluding capital items such as revaluation of property) and £1.04 million "capital" profit analysed as follows:








Unaudited


Unaudited


Unaudited




6 months ended


9 months ended


3 months ended




31 December 2009


31 March 2010


31 March 2010




£million


£million


£million

Net property income


5.94


8.83


2.89

Investment Manager's fees


-0.64


-1.01


-0.37

Other income and expenses


-1.58


-2.03


-0.45

Net finance costs


-2.02


-2.97


-0.95

Current tax


-0.19


-0.47


-0.28

Revenue profit


1.51


2.35


0.84











Unrealised losses on revaluation of property


-7.70


-7.76


-0.06

Unrealised gain on revaluation of Porto Kali investment (loan receivable)


0.86


0.86


0.00

Unrealised (losses)/gains on derivatives (hedging interest rate and foreign exchange exposures)


-5.38


-3.94


1.44

Other income and expenses


0.01


0.01


0.00

Deferred tax


0.05


-0.29


-0.34

Capital (loss)/profit


-12.16


-11.12


1.04











Total net (loss)/profit


-10.65


-8.77


1.88



The Company's net property yield on current market valuation (after acquisition and operating costs) as at 31 March 2010 was 7.52% (7.50% as at 31 December 2009).





NET ASSET VALUE



The unaudited Company's Consolidated Net Asset Value per share of AXA Property Trust Limited (the "Company") as at 31 March 2010 was 78.49 pence (76.13 pence as at 31 December 2009).



The Net Asset Value attributable to the Ordinary Shares is calculated under International Financial Reporting Standards. It includes all current year income and is calculated after the deduction of dividends paid prior to 31 March 2010, but does not include provision for the quarterly interim dividend of 0.75 pence per share announced on 5 May 2010 and to be paid 28 May 2010.



The £2.36 million increase in Net Asset Value over the quarter ended 31 March 2010 can be analysed as follows:






Unaudited


Unaudited




9 months


3 months




£million


£million

Opening Net Asset Value


1 July 2009


1 January 2010




83.46


76.13

Net (loss)/profit


-8.77


1.88

Unrealised gains on derivatives


1.59


0.87

Dividends paid


-2.25


-0.75

Foreign exchange translation gains


4.46


0.36

Closing Net Asset Value 31 March 2010


78.49


78.49



During the quarter the Sterling valuation of the property portfolio increased by £0.56 million (0.4%) to £146.25 million. Excluding foreign exchange translation movements the portfolio valuation declined by £0.06 million (0.04%).





SHARE PRICE AND DISCOUNT TO NET ASSET VALUE



As at close of business on 31 March 2010, the mid market price of the Company's shares on the London Stock Exchange was 50.5 pence, representing a discount of 35.7% on the Company's Net Asset Value at 31 March 2010.



As at close of business on 18 May 2010, the mid market price of the Company's shares was 49.25 pence, representing a discount of 37.3% on the Company's Net Asset Value at 31 March 2010.











DIVIDENDS

The third interim dividend of 0.75 pence per share in respect of the year ending 30 June 2010 was declared on 5 May 2010, with an ex-dividend date of 12 May 2010, record date of 14 May 2010 and payment date of 28 May 2010. The cumulative interim dividends of £2.25 million declared in respect of the 9 months period ended 31 March 2010 were 104% covered by "revenue" profits and 141% covered by operating cash flow (excluding capital expenditure and foreign exchange).



STRATEGY AND MARKET



Country Allocation at 31 March 2010



Country % of portfolio

Germany 59%

Netherlands 20%

Italy 17%

Belgium 4%





Sector Allocation 31 March 2010



Sector % of portfolio

Retail 58%

Industrial 18%

Office 15%

Leisure 9%





AXA Real Estate, the Company's Real Estate Adviser, believes that pricing in the Continental European real estate market has now reached a trough in many territories. While there remains downward pressure on rents in occupational markets, this has now largely been incorporated into market pricing.



In this environment, the Real Estate Adviser and AXA Investment Managers UK Limited (the Company's Investment Manager) continue to maintain their focus on rental income as a first priority.



The portfolio's income stream is well secured against strong tenant covenants and benefits from a low vacancy rate. The portfolio tenant base is weighted towards the defensive food retail sector and enjoys a weighted average lease length of 5.5 years. This figure is set to increase over 2010 as letting projects currently underway come to fruition.





FUND GEARING






Unaudited


Unaudited






31 December 2009


31 March 2010


Movement




£million /%


£million /%


£million /%

Property portfolio


145.69


146.25


0.6 (0.4%)

Borrowings


77.87


78.20


0.33 (0.42%)

Total gross gearing excluding Porto Kali


53.4%


53.5%


0.1 percentage pts

Total net gearing excluding Porto Kali


41.3%


41.4%


0.1 percentage pts

Total gross gearing including Porto Kali


56.6%


56.6%


0.0 percentage pts

Fund gearing increased by 0.1 percentage points over the quarter to 53.5% as at 31 March 2010.

Fund gearing is included to provide an indication of the overall indebtedness of the Company and does not relate to any covenant terms in the Company's loan facilities. Gross gearing is calculated as debt over property portfolio at fair value. Net gearing is calculated as debt less cash over property portfolio at fair value.





LOAN FACILITIES



Gross Loan to Value Covenants


Unaudited


Unaudited






31 December 2009


31 March 2010


Maximum

Main loan facility


52.86%


53.1%


50.0%

Joint venture Property Trust Agnadello S.r.l.


59.6%


57.1%


65.0%

Consortium investment Porto Kali


74.32%


74.6%


80.0%






Unaudited


Unaudited


Unaudited


Unaudited

Interest Cover Ratio at 31 March 2010


Historic


Minimum


Projected


Gross rental income headroom

Main loan facility covenant


318.0%


250.0%


743.8%


66.4%

Joint venture Property Trust Agnadello S.r.l.


301.7%


125.0%


392.8%


68.2%

Consortium investment Porto Kali


213.0%


120.0%


242.0%


37.7%



Interest Cover Ratio (ICR) is calculated as net financing expense payable as a percentage of gross rental income less movement in arrears. (In the case of Property Trust Agnadello, ICR is calculated as net financing expense payable as a percentage of net rental income less movement in arrears). Gross rental income headroom is based on projected interest cover.





MAIN LOAN FACILITY



Following the lapse of the of the Loan to Value ("LTV") waiver announced in the most recent Net Asset Value RNS (dated 9 February 2010), in May 2010 the Investment Manager has finalised terms for a waiver of the prevailing LTV breach with Credit Agricole Corporate & Investment Bank on the Company's £70.11 million (€78.6 million) long term debt facility.



The key terms of the waiver are as follows:

a) No paydown required to cure the existing LTV breach;

b) LTV covenant increased from 50% to 55% until expiry of the loan facility on 3 April 2011;

c) No further quarterly LTV testing until 30 November 2010;

d) Security over the assets via mortgages (and other securities) to be given in favour of the lenders and;

e) Increase in interest margin by 55 basis points based on the current market rate (from 0.85% to 1.40%).



The Board and the Investment Manager continue to seek the best refinancing terms for the Fund going forward. Negotiations with the lenders (Credit Agricole and Landesbank Berlin) on the refinancing, although protracted, have so far been positive and both parties are in the process of evaluating solutions. Having finalised the waiver the Investment Manager will now step up negotiations with the lenders in respect of a full refinancing of the loan facility. The board continue to review and monitor progress on the planned refinancing closely.

The Company and its subsidiaries held total cash of £17.56 million (€19.68 million) at 31 March 2010. £11.6 million (€13.0 million) cash is held on short term deposit to be realised as required for the capital expenditure programme and other cash requirements including £4.30 million (€4.8 million, previously budgeted at €5.3 million) committed for the development of the Company's retail asset in Fuerth, Germany which was announced in December 2009 (RNS dated 15 December 2009) and a further £1.50 million (€1.70 million) allocated but uncommitted to potential projects at Dasing, Koethen and Bernau.

The Company's loans with Credit Agricole are fully hedged at an average rate of 5.21% via interest rate swaps until July 2010 and then by interest rate caps at a strike rate of 4.50% until April 2011 when the loan facility expires.





OUTLOOK



As continental Europe emerges from recession the Investment Manager is undertaking a strategic review of portfolio allocation, with a focus on the significant exposure to Germany. The defensive retail properties held by the Company in Germany proved to be relatively resilient in terms of both value and income security during the recession. Looking forward the Investment Manager believes this sector continues to deserve a significant allocation, but also recognises that attractive opportunities now exist in other European territories. In particular opportunities are being examined in the industrial and office sectors in both France and Spain. In 2010 the Investment Manager aims to make selected disposals from the German portfolio. Disposal decisions will be based both on future return prospects, and the opportunity to maximise value creation following the successful completion of an asset management initiative.



AXA Real Estate continues to progress management projects across the portfolio. Construction at Fuerth is due to commence shortly following successful signing of a lease with the major supermarket anchor tenant and is due for delivery in January 2011. Further lettings and lease renewals are being negotiated with tenants at Fuerth as well as Dasing, Koethen and Bernau. Once finalised over the coming months, these lettings are expected to have a positive impact on total rental income, as well as significantly increasing the portfolio's weighted average lease length.

[davebowler] 26/2/2010 10:41

Report out - looks good