F&C UK Real Est. Inv. Net Asset Value(s)

 
TIDMFCRE 
 
To:                 Company Announcements 
 
Date:              26 October 2017 
 
Company:        F&C UK Real Estate Investments Limited 
 
LEI:                231801XRCB89W6XTR23 
 
Subject:          Net Asset Value 
 
Net Asset Value 
 
The unaudited net asset value per share of F&C UK Real Estate Investments 
Limited ("FCRE") as at 30 September 2017 was 102.7 pence. This represents an 
increase of 2.6 per cent from the net asset value per share as at 30 June 2017 
of 100.1 pence and a NAV total return for the quarter of 3.9 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 30 September 2017 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 30 September 2017, which is 
expected to be paid in December 2017. 
 
Share Price 
 
The share price was 106.0 pence per share at 30 September 2017, which 
represented a premium of 3.2 per cent to the NAV per share announced above. The 
share price total return for the quarter was 0.5 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 30 June 2017 to 30 September 
2017. 
 
                                                      Pence    % of 
                                                        per opening 
                                                      share     NAV 
 
Net asset value per share as at 30 June 2017          100.1 
 
Unrealised movement in valuation of property            1.0    1.0* 
portfolio (including the effect of gearing) 
 
Surrender Premium received                              1.8     1.8 
 
Movement in revenue reserves                          (0.2)   (0.2) 
 
Net asset value per share as at 30 September 2017     102.7     2.6 
 
* The un-geared increase in the valuation of the property portfolio over the 
quarter to 30 September 2017 was 0.7%. 
 
The NAV return for the quarter was enhanced on account of an asset management 
initiative at Northfields Retail Park, Rotherham where the existing lease was 
surrendered in return for a substantial cash payment to FCRE, alongside a 
simultaneous re-letting of the property.  This asset management initiative saw 
a reduction of the overall level of rent receivable, rebased in line with the 
current market level for a retail warehouse property of this size in this 
location.  This was coupled with an extension of the guaranteed lease term to 
an occupier who is investing considerable capital into the asset.  This 
transaction created an attractive total return for the company with the cash 
payment received from the out-going tenant being significantly in excess of the 
negative impact on the asset valuation. 
 
The net gearing as at 30 September 2017 was 29.4%# 
 
# Bank debt (less net current assets) divided by fair value of investment 
properties 
 
Portfolio Analysis                             GBPm        % of  % capital 
                                                    portfolio      value 
                                                     as at 30  movement 
                                                    September in quarter 
                                                         2017 
 
Offices                                      91.5        26.3        1.4 
 
West End                                     27.7         7.9        7.0 
 
South East                                   33.7         9.7          - 
 
Rest of UK                                   30.1         8.7      (1.6) 
 
Retail                                       65.2        18.7        0.8 
 
West End                                      8.4         2.4       11.3 
 
Rest of London                                3.9         1.1          - 
 
South East                                   18.2         5.2      (0.8) 
 
Rest of UK                                   34.7        10.0      (0.5) 
 
Industrial                                  118.3        33.9        1.9 
 
South East                                  118.3        33.9        1.9 
 
Retail Warehouse                             73.7        21.1      (2.0) 
 
Rest of London                                9.1         2.6        2.8 
 
Rest of UK                                   64.6        18.5      (2.7) 
 
Total Property                              348.7       100.0        0.7 
 
Property Purchases and Sales 
 
During the quarter, IRP Holdings Limited, a subsidiary of FCRE, purchased a 
59,000 sq ft distribution unit in Basingstoke for GBP9.56 million, reflecting a 
net initial yield of 5.2 per cent. The property is let to one tenant, Bunzl UK 
Ltd, on a lease expiring 2027, at a rent of GBP525,300 per annum. The purchase 
was funded out of the company's existing cash reserves. 
 
There were no other purchases or sales in the quarter. 
 
Summary Balance Sheet 
 
                                                  GBPm   Pence    % of 
                                                         per     Net 
                                                       share  Assets 
 
Property Portfolio per Valuation Report        348.7   144.8   141.1 
 
Adjustment for lease incentives                (4.4) 
                                                       (1.8)   (1.8) 
 
Fair Value of Property Portfolio               344.3   143.0   139.3 
 
Cash                                             6.2     2.6     2.5 
 
Trade and other receivables                      6.1     2.5     2.5 
 
Trade and other payables                       (7.3)   (3.0)   (3.0) 
 
Interest-bearing loans                       (102.1)  (42.4)  (41.3) 
 
Net Assets at 30 September 2017                247.2   102.7   100.0 
 
The property portfolio will next be valued by an external valuer during 
December 2017 and the net asset value per share as at 31 December 2017 will be 
announced in January 2018. 
 
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

October 26, 2017 06:14 ET (10:14 GMT)