BMO Real Estate Investments Ltd Net Asset Value

 
TIDMBREI 
 
To:                   Company Announcements 
 
Date:                2 May 2019 
 
Company:          BMO Real Estate Investments Limited 
 
LEI:                  231801XRCB89W6XTR23 
 
Subject:            Net Asset Value 
 
Net Asset Value 
 
The unaudited net asset value per share of BMO Real Estate Investments Limited 
("BREI") as at 31 March 2019 was 106.0 pence. The net asset value per share as 
at 31 December 2018 was 106.0 pence. The NAV total return for the quarter was 
1.2 per cent 
 
The net asset value is based on the external valuation of the Group's property 
portfolio prepared by Cushman & Wakefield. 
 
The net asset value is calculated under International Financial Reporting 
Standards ("IFRS"). 
 
The net asset value includes all income to 31 March 2019 and is calculated 
after deduction of all dividends paid prior to that date.  It does not include 
a provision for the dividend for the quarter to 31 March 2019, which is 
expected to be paid in June 2019. 
 
Share Price 
 
The share price was 87.6 pence per share at 31 March 2019, which represented a 
discount of 17.4 per cent to the NAV per share announced above. The share price 
total return for the quarter was -3.7 per cent. 
 
Breakdown of NAV movement 
 
Set out below is a breakdown of the change to the unaudited net asset value per 
share calculated under IFRS over the period from 31 December 2018 to 31 March 
2019. 
 
                                                                  Pence      % of 
                                                                    per   opening 
                                                                  share       NAV 
 
Net asset value per share as at 31 December 2018                  106.0 
 
Unrealised movement in valuation of property portfolio              0.3      0.3* 
(including the effect of gearing) 
 
Realised loss on sale of property                                 (0.1)     (0.1) 
 
Movement in revenue reserves                                      (0.2)     (0.2) 
 
Net asset value per share as at 31 March 2019                     106.0         - 
 
* The un-geared increase in the valuation of the property portfolio over the 
quarter to 31 March 2019 was 0.3%. 
 
The net gearing as at 31 March 2019 was 26.4% # 
 
# Bank debt (less net current assets) divided by fair value of investment 
properties 
 
Performance 
 
The capital value of the portfolio increased by 0.3 per cent over the quarter, 
compared to the 0.8 per cent fall in the MSCI UK Monthly Property Index for 
standing investments over the same period. 
 
Positive performance was attributable to the successful outcome of asset 
management initiatives at a number of properties, particularly leasing activity 
within the Rest of UK Offices subsector, the West End Office assets and the 
South East Industrial assets. Of particular note was the letting, post 
extensive refurbishment, of the office at Standard Hill, Nottingham to the 
College of Law on the basis of a new 15-year lease at a rent of GBP576,000 p.a. 
There has also been refurbishment work at the office property at 14 Berkeley 
Street, London, and following completion, the 1st and 5th floors were let 
during the quarter, delivering combined additional rental income of GBP271,000 
p.a. 
 
Transaction levels are low, particularly for the retail market which remains 
under considerable pressure, with continued stress within the occupier markets 
weighing on investor sentiment. The retail element of the Company's portfolio 
decreased in value by 3.3 per cent over the quarter, with the impact most 
keenly felt across the High Street portfolio. The decrease in value of the 
portfolio's retail warehouse assets of 1.9 per cent was attributable to a 
further downgrade to the property at Northfields, Rotherham, currently let to 
Homebase and subject to reduced rent under a CVA. 
 
39.2 per cent of the portfolio comprises Industrial assets located within the 
south east which continue to deliver income growth. These assets experienced 
capital growth over the period of 2.4 per cent. 
 
At the period end the portfolio void rate was 0.1% per cent and the average 
weighted unexpired lease term was 6.1 years. 
 
Portfolio Analysis                                                % of   % capital 
                                                             portfolio       value 
                                                      GBPm      as at 31   movement 
                                                            March 2019  in quarter 
 
Offices                                             90.7          26.2         2.0 
 
West End                                            28.4           8.2         0.7 
 
South East                                          27.9           8.1       (0.9) 
 
Rest of UK                                          34.4           9.9         5.7 
 
Industrial                                         135.8          39.2         2.4 
 
South East                                         135.8          39.2         2.4 
 
Standard Retail                                     53.2          15.4       (5.0) 
 
West End                                             8.4           2.4           - 
 
Rest of London                                       3.1           0.9       (6.1) 
 
South East                                          16.5           4.8       (4.9) 
 
Rest of UK                                          25.2           7.3       (6.4) 
 
Retail Warehouse                                    66.3          19.2       (1.9) 
 
Rest of UK                                          56.5          16.4       (2.2) 
 
Rest of London                                       9.8           2.8           - 
 
Total Property                                     346.0         100.0         0.3 
 
Property Purchases and Sales 
 
During the quarter, the Group completed the sale of a retail warehouse, in 
Sands Road, Swalwell, Gateshead for GBP2.2 million in line with the Q4 2018 
valuation. 
 
There were no other sales or purchases in the quarter. 
 
Summary Balance Sheet 
 
                                                               Pence per     % of Net 
                                                         GBPm        share       Assets 
 
Property Portfolio per Valuation Report               346.0        143.8        135.7 
 
Adjustment for lease incentives                       (4.2) 
                                                                   (1.8)        (1.7) 
 
Fair Value of Property Portfolio                      341.8        142.0        134.0 
 
Cash                                                   10.3          4.3          4.1 
 
Trade and other receivables                             5.7          2.4          2.2 
 
Trade and other payables                              (6.2)        (2.6)        (2.5) 
 
Interest-bearing loans                               (96.4)       (40.1)       (37.8) 
 
Net Assets at 31 March 2019                           255.2        106.0        100.0 
 
The property portfolio will next be valued by an external valuer during June 
2019 and the net asset value per share as at 30 June 2019 will be announced in 
July 2019. 
 
This announcement contains inside information. 
 
Enquiries: 
 
The Company Secretary 
Northern Trust International Fund Administration Services (Guernsey) Limited 
Trafalgar Court 
Les Banques 
St Peter Port 
Guernsey 
GY1 3QL 
 
Tel: [phone] 
Fax: [phone] 
 
Peter Lowe 
Scott Macrae 
F&C Investment Business Ltd 
Tel: [phone] 
Fax: [phone] 
 
 
 
END 
 

(END) Dow Jones Newswires

May 03, 2019 08:28 ET (12:28 GMT)