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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| F&c Commercial Property Trust Limited | LSE:FCPT | London | Ordinary Share | GG00B4ZPCJ00 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 121.20 | 121.40 | 121.60 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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To: Company Announcements
Date: 4 August 2020
Company: BMO Commercial Property Trust Limited
LEI: 213800A2B1H4ULF3K397
Subject: Trading update for BMO Commercial Property Trust Ltd (the
"Company")
Background
This announcement provides a further update on the evolving position of the
Company since the previous announcement on 16th April 2020. The focus of the
Board continues to be dominated by addressing the many challenges arising from
the Covid-19 pandemic. Our priorities are the wellbeing of everyone engaged in
managing the Company's portfolio and equally providing support to our tenants
where needed. At the same time, the Board has also been focussed on preserving
the Company's financial strength with the ambition of reintroducing a
sustainable dividend at the earliest appropriate time.
Headlines
* Net Asset total return of -2.9 per cent for the quarter ended 30 June 2020
* Share Price total return of -15.4 per cent for the quarter ended 30 June
2020
* Rent collection for quarter 2 of 83.0 per cent
* Rent collection for quarter 3 to date of 68.0 per cent
* Completion of the sale of non-income producing Industrial land for c.GBP5.5
million
* Practical completion of a fully let foodstore development at Newbury Retail
Park
* Agreed terms for the extension of a GBP100 million loan facility to 31 July
2022
* Reintroduction of monthly dividends of 0.25 pence per share from August
2020
Net Asset Value
The unaudited net asset value ('NAV') per share of the Company as at 30 June
2020 was 120.7 pence. This represents a decrease of 2.9 per cent from the
unaudited NAV per share as at 31 March 2020 of 124.3 pence and a NAV total
return for the quarter of -2.9 per cent.
The NAV has been calculated under International Financial Reporting Standards
('IFRS'). It is based on the external valuation of the Company's property
portfolio which has been prepared by CBRE Limited. The valuation certificate
includes a 'material uncertainty' clause, in-line with RICS guidance, due to
the shortage of transactional evidence to inform opinions of value. Valuers are
therefore exercising a higher degree of caution and giving less weight to
previous market evidence for comparison purposes.
This 'material uncertainty' clause no longer applies to industrial, logistics
and distribution assets; these account for 17.8 per cent of the Company's
portfolio.
The NAV includes all income to 30 June 2020 and is calculated after deduction
of all dividends paid prior to that date. The EPRA NAV as at 30 June 2020,
which is adjusted to remove the fair value of the interest rate swap, was 120.7
pence.
Analysis of Movement in NAV
The following table provides an analysis of the movement in the unaudited NAV
per share for the period from 31 March 2020 to 30 June 2020 (including the
effect of gearing):
% of
Pence opening
per NAV per
GBPm share share
NAV as at 31 March 2020 993.6 124.3
Unrealised decrease in valuation of (38.1) (4.7) (3.8)
property portfolio
Movement in fair value of interest rate (0.1) 0.0 0.0
swap
Other net revenue 9.1 1.1 0.9
Dividends paid - - -
NAV as at 30 June 2020 964.5 120.7 (2.9)
Valuation
The capital return of the Company's portfolio was -3.0 per cent for the
quarter. The retail and leisure sectors continue to be marked down, most
significantly Newbury Retail Park, Wimbledon Broadway and St Christopher's
Place falling by 7.6 per cent, 6.7 per cent and 3.1 per cent respectively.
These decreases reflect a further outward adjustment in yields as well as an
allowance for prospective rent adjustments.
The valuation of our office portfolio fell by 2.2 per cent over the quarter.
The main reason for this was a material 'one off' adjustment of the Leonardo
Building in Crawley to reflect revised lease terms agreed with Virgin Atlantic
as part of their overall financial restructuring.
The industrial and logistics portfolio fell by 1.5 per cent, due to yield
movement on the shorter leased properties.
Share Price
As at 30 June 2020, the share price was 63.0 pence per share, which represented
a discount of 47.8 per cent to the NAV per share. The share price total return
for the quarter to 30 June 2020 was -15.4 per cent.
Rent Collection
The Company has a diverse tenant base across the portfolio and its Managers
have been proactively engaged with many of them, assessing and responding to
requests for support on a case by case basis. We summarise below our current
rent collection outcome for Quarter 2 as well as providing an update for
Quarter 3.
Quarter 2 Collection (billed between 26 March 2020 and 1 June 2020)
To date the Company has collected 83.0 per cent of the rents due for Quarter 2.
Collection by sector:
Rent Billed Collected
(GBPm) (GBPm) (%)
Industrial 3.3 3.1 92.8
Offices 6.8 6.4 94.8
Retail Warehouse 2.0 1.6 81.6
Retail 3.1 1.8 56.1
Alternatives 1.1 0.6 59.3
Total 16.3 13.5 83.0
Breakdown of uncollected rent:
Total Outstanding Rent Billed
(GBPm) (%)
Agreed deferments 0.8 4.9
Rent waived 0.4 2.4
Monthly payments* 0.1 0.4
Unresolved / in 1.5 9.3
discussion
Uncollected Rent 2.8 17.0
* tenants who have been billed for the quarter but are paying in monthly
instalments.
Approximately GBP0.9m of the GBP1.5m currently unresolved rental payments relate to
St Christopher's Place but advanced discussions are now underway with many
tenants that have recently reopened for business and we expect this figure to
improve over the coming few weeks.
Quarter 3 Collection (billed between 24 June 2020 and 1 September 2020)
The total quarterly rental payments for Quarter 3 amount to c.GBP16.5 million.
The Company has billed GBP13.5m of its Quarter 3 rent due from 24 June to date
and has collected 68.0 per cent of this total amount (compared to 98.5 per cent
for the same period last year and 70.0 per cent after the equivalent number of
days in Quarter 2). Collection patterns to date are therefore similar to those
experienced last quarter. The balance of rent will be billed on the relevant
due dates during the course of August.
Collection by sector:
Rent Billed Collected
(GBPm) (GBPm) (%)
Industrial 3.2 2.7 85.9
Offices 5.0 3.9 79.1
Retail Warehouse 1.2 0.7 59.7
Retail 3.1 1.2 39.7
Alternatives 1.0 0.6 54.1
Total 13.5 9.1 68.0
Breakdown of uncollected rent:
Total Outstanding Rent Billed
(GBPm) (%)
Agreed deferments 0.4 2.9
Rent waived 0.2 1.1
Monthly payments* 0.5 3.5
Outstanding 3.3 24.5
Uncollected Rent 4.4 32.0
* tenants who have been billed for the quarter but are paying in monthly
instalments.
Trading Activity
St Christopher's Place Estate ('SCP')
On 15 June 'non-essential' retailers were allowed to reopen and approximately
80 per cent of the shops at the Estate are now trading with the number
increasing steadily each week. Restaurants could reopen from 4 July and around
three quarters have done so to date. Support has been offered to tenants on a
case by case basis with many of the concessionary agreements expected to remain
in place until at least the end of this year.
Retail Parks
The majority of retailers at the Newbury and Solihull retail parks have now
reopened. At Solihull the carpark is consistently operating at 80 per cent
capacity whereas at Newbury it is closer to 60 percent. Customer numbers are
down but average spend is up and where our tenants have both retail park and
high street stores, they are reporting stronger performance from the former.
Sales
The Company completed the contractually agreed sale of Phase 2 of the former
Ozalid Works, Colchester to Persimmon Homes for c.GBP5.5 million on 30 July 2020.
This was a disposal of non-income producing land and obsolete industrial
buildings with planning consent for residential development.
Developments
The construction work at Newbury Retail Park has continued throughout the last
three months in accordance with Government guidelines and all units have now
achieved practical completion. The unit to be occupied by Lidl was handed over
in June and the tenant is fitting out with a target opening date in early
Autumn 2020.
Work at St Christopher's Place and Solihull Retail Park did pause for a period
during lockdown but has now resumed under strict safe operating practices. At
Solihull we have experienced a nine week delay due to the temporary site
closure and availability of building materials. Completion of the new pre-let M
&S store is now programmed for February 2021.
Uncommitted capital expenditure continues to be deferred for the time being.
Cash and Borrowings
The Company had approximately GBP23 million of available cash as at 30 June 2020
and an undrawn revolving credit facility of GBP50 million. The long-term debt
with L&G does not need to be refinanced until December 2024 and we have
recently agreed terms to extend the existing Barclays GBP50 million term loan,
and the GBP50 million revolving credit facility, previously due to expire on 21
June 2021. These will be extended to 31 July 2022, with the option of two
further one-year extensions. As at 30 June 2020, the Company's loan to value
('LTV') was 22.9 per cent.
The Company continues to comfortably meet its covenants on the GBP260 million
long-term loan with L&G at the current time.
There is also significant headroom on the loan to value covenant of the GBP50
million loan facility with Barclays, which relates to the St Christopher's
Place assets. The interest cover test is more challenging but is still being
passed. This particular covenant test has been discussed with Barclays, who
remain sympathetic given current events. As indicated by the agreed extension
of the existing facility, they are prepared to support the business through
this uncertain period.
Dividend
As announced in the Company's previous trading update on 16 April 2020, in view
of the uncertainty of the impact that Covid-19 was expected to have on future
rental receipts, particularly in relation to the retail and leisure tenants,
the Board has considered it prudent to temporarily suspend its future monthly
dividend payments in order to strengthen cash reserves and protect the
long-term value of the Company.
The Company has made good progress over the last three months with rent
collection at a higher level than was originally feared. Progress has also been
made in reaching agreement to restructure leases and the short-term deferral of
rent for stressed tenants. The Board have therefore made the decision to
reintroduce monthly dividends at 50 per cent of the previous rate, and today
announces a monthly property income distribution payment in respect of the
financial year ended 31 December 2019 of 0.25 pence per share as detailed in
the schedule below.
Ex-Dividend Date 13 August 2020
Record Date 14 August 2020
Pay Date 28 August 2020
The level of monthly dividend will remain at this rate until further notice but
will be kept under review in light of the significant economic risks and
continuing uncertainty regarding the path of Covid-19.
Portfolio Analysis - Sector Breakdown
Portfolio % of % like for
Value portfolio as like capital
GBPm at value shift
30 June 2020 (excl
transactions)
Offices 529.0 42.0 -2.2
West End 208.3 16.5 -0.3
South East 78.8 6.3 -9.2
South West 31.8 2.5 -2.0
Rest of UK 190.3 15.1 -1.2
City 19.8 1.6 -2.4
Retail 259.4 20.6 -5.1
West End 196.0 15.5 -5.7
South East 32.5 2.6 -7.1
Rest of UK 30.9 2.5 -0.8
Industrial 223.7 17.8 -1.5
South East 28.2 2.2 -1,1
Rest of UK 195.5 15.6 -1.6
Retail 119.5 9.5 -4.5
Warehouse
Alternatives 127.7 10.1 -0.4
Total Property 1,259.3 100.0 -3.0
Portfolio
Portfolio Analysis - Geographic Breakdown
Market % of portfolio
Value as at
GBPm 30 June 2020
West End 465.1 36.9
South East 260.5 20.7
Scotland 167.2 13.3
North West 150.8 12.0
Midlands 138.0 10.9
South West 31.8 2.5
Eastern 26.1 2.1
Rest of London 19.8 1.6
Total Property Portfolio 1,259.3 100.0
Top Ten Investments
Sector
Properties valued in excess of GBP250 million
London W1, St Christopher's Place Estate * Mixed
Properties valued between GBP100 million and GBP150
million
London SW1, Cassini House, St James's Street Office
Properties valued between GBP50 million and GBP70
million
Newbury, Newbury Retail Park Retail Warehouse
London SW19, Wimbledon Broadway ** Mixed
Properties valued between GBP40 million and GBP50
million
Solihull, Sears Retail Park Retail Warehouse
Winchester, Burma Road Alternative
Manchester, 82 King St Office
Properties valued between GBP30 million and GBP40
million
Crawley, Leonardo House, Manor Royal Office
Aberdeen, Unit 2 Prime Four Business Park, Office
Kingswells
Aberdeen, Unit 1 Prime Four Business Park, Office
Kingswells
* Mixed use property of retail, office, food/beverage and residential space.
** Mixed use property of retail, food/beverage and leisure space.
Summary Balance Sheet
GBPm Pence % of
per Net
share Assets
Property Portfolio 1,259.3 157.5 130.5
Adjustment for lease incentives (22.6) (2.8) (2.3)
Fair Value of Property Portfolio 1,236.7 154.7 128.2
Trade and other receivables 34.2 4.3 3.5
Cash and cash equivalents 22.8 2.9 2.4
Current Liabilities (18.6) (2.3) (1.9)
Total Assets (less current liabilities) 1,275.1 159.6 132.2
Non-Current liabilities (1.7) (0.2) (0.2)
Interest rate swap (0.4) (0.1) 0.0
Interest-bearing loans (308.5) (38.6) (32.0)
Net Assets at 30 June 2020 964.5 120.7 100.0
The next quarterly valuation of the property portfolio will be conducted by
CBRE Limited during September 2020 and it is expected that the unaudited NAV
per share as at 30 September 2020 will be announced in October 2020.
Important information
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014. Upon the publication of this announcement via Regulatory
Information Service this inside information is now considered to be in the
public domain.
Enquiries:
Richard Kirby
BMO REP Asset Management plc
Tel: 0207 499 2244
Graeme Caton
Winterflood Securities Limited
Tel: 0203 100 0268
END
(END) Dow Jones Newswires
August 04, 2020 02:00 ET (06:00 GMT)
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