31 August
2017
STANDARD LIFE INVESTMENTS PROPERTY
INCOME TRUST
RESULTS IN RESPECT OF THE PERIOD ENDED
30 JUNE 2017
Financial Highlights
- NAV total return of 6.6% in the six month period, driven by above
benchmark valuation increases and successful asset management
activity.
- Strong share price total return over the period of 6.0%
compared to total return on FTSE All-Share Index of 5.5% and FTSE
All-Share REIT Index of 3.5% with the Company’s shares trading at a
premium to NAV of 6.4% as at 30 June
2017.
- The Company has continued to reduce gearing as proceeds from
£22.3 million of sales was used to reduce LTV to 19.9% at period
end (31 Dec 2016: 26.0%). Post the
period end, significant net investment has been made into the
portfolio but with LTV still remaining prudent at 23.6% as at
23 August 2017.
- Dividend cover of 111% over the period (103% if one-off
dilapidation receipts excluded) as successful asset management
activity helped negate effect of sales.
- The yield on the Company’s share price as at 30 June 2017 stood at 5.3% which compares
favourably to the FTSE All-Share Index (3.6%) and FTSE All-Share
REIT Index (3.6%) at the same date.
- A total of 8.125 million shares were issued under the
Company’s blocklisting facility in the six month period generating
net proceeds of £6.9 million for investment into the portfolio.
- Overall, the Company, with a market capitalisation of £347
million as at 30 June 2017, has a
secure and growing balance sheet, significant financial resources
and a portfolio of assets that continues to underpin an attractive
and covered dividend for shareholders.
Property Highlights
- As at 30 June 2017, the portfolio
was valued at £418.1 million and yielded 5.9%.
- Property total return for the period was 5.6%, significantly
ahead of the IPD Quarterly version of Monthly Index total return of
4.5%. The capital return of 2.2% and the income return of 3.3% from
the portfolio both continued to outperform the comparative
benchmark figures (2.0% and 2.4% respectively).
- Net sales totalled £22.3million in the period, including the
Company’s largest and only City of
London asset at White Bear Yard, in order to realise profit
and remove the risk of potential future underperformance.
- Post the period end, significant net investment was made into
the portfolio of £14.2 million in a number of income accretive
assets, across the industrial and office sectors, that offer asset
management opportunities to enhance both income and capital
returns.
- A number of successful asset management initiatives,
contributing to income and capital values, completed during the
period including:
- 7 new lettings completed during the year securing £519,000 of
rent
- 7 rent reviews resulting in additional income of £111,000 per
annum
- Void rate of 6.7% as at period end (31
Dec 2016: 3.3%) with main voids relating to an industrial
unit in Rainham, where there is an interested party and an
opportunity to capture significant reversionary potential and also
Oldham, where terms have been
agreed to sell the unit.
- Positive rent collection rates of 99% within 21 days
highlighting the continued strength of tenant covenants in an
environment where income will be the key component of returns going
forward.
PERFORMANCE SUMMARY
Earnings & Dividends |
|
|
30 June
2017 |
30 June
2016 |
EPRA earnings per share |
|
|
2.64 |
2.64 |
Dividends declared per ordinary
share (p) |
|
|
2.380 |
2.351 |
Dividend cover (%)* |
|
|
111 |
111 |
Dividend yield (%)** |
|
|
5.3 |
6.0 |
FTSE Real Estate Investment Trusts
Index Yield (%) |
|
|
3.6 |
3.7 |
FTSE All-Share Index Yield (%) |
|
|
3.6 |
3.7 |
Capital Values &
Gearing |
|
30 June 2017 |
31 December
2016 |
% Change |
Total Assets (£million) |
|
447.6 |
445.7 |
0.4 |
Net asset value per share (p) |
|
83.9 |
81.0 |
3.6 |
Ordinary Share Price (p) |
|
89.25 |
86.50 |
3.2 |
Premium/(Discount) to net asset
value (%) |
|
6.4 |
6.8 |
- |
Loan to value (%)*** |
|
19.9 |
26.0 |
- |
Total Return %
|
6 Month |
1 Year |
3 Year |
5 Year |
NAV**** |
6.6 |
8.7 |
42.0 |
93.3 |
Share Price**** |
6.0 |
19.1 |
38.1 |
92.2 |
FTSE Real Estate Investment Trusts
Index |
3.5 |
9.2 |
19.6 |
78.3 |
FTSE All-Share Index
|
5.5 |
18.1 |
23.9 |
65.2 |
Property Returns & Statistics
% |
|
|
Period ended 30 June
2017 |
Period ended 30 June
2016 |
Property income return
|
|
|
3.3 |
3.1 |
IPD property income monthly index
|
|
|
2.4 |
2.3 |
Property total
return |
|
|
5.6 |
3.9 |
IPD property total return monthly
index |
|
|
4.5 |
2.5 |
Void rate |
|
|
6.7 |
3.8 |
* Calculated as revenue earnings per share (excluding capital items
& swap breakage costs) as a percentage of dividends declared in
the period.
** Based on an annual dividend of 4.76p and the share price at 30
June.
***Calculated as bank borrowings less all cash as a percentage of
the open market value of the property portfolio as at the end of
each period.
****Assumes re-investment of dividends excluding transaction
costs.
Sources: Standard Life Investments, Investment Property Databank
(“IPD”)
CHAIRMAN’S STATEMENT
I am pleased to report that your Company continued to perform
well in the six month period to 30 June
2017 against a backdrop of ongoing political uncertainty.
The property portfolio delivered an above benchmark performance
which underpinned a robust NAV total return. In addition, the
Company produced a strong share price total return as the Company
maintained its premium rating. The number of shares in issue
increased marginally through the judicious use of its blocklisting
facility and, as at 30 June, your Company was capitalised at £347
million.
Background
In what is becoming a common theme, uncertainty again took hold
in the UK in the first six months of 2017. Following on from the
surprise EU referendum outcome in 2016, the UK general election,
called with the intention of strengthening the Government’s hand in
Brexit negotiations, unexpectedly produced a hung parliament. This
result, on top of the fact that Brexit negotiations have started
with vastly differing views on what the eventual outcome will mean
for the UK, has resulted in a background of political uncertainty
not seen in this country for a generation.
While it is too early to say what the impact, if any, of the
election result will be on the UK economy, the resilience of the
economy post the EU referendum vote has started to wane. A weaker
consumer sector, impacted by rising inflation which has put a
squeeze on spending power, caused the rate of growth to slow to
0.3% in the second quarter of 2017 compared to 0.7% recorded in Q4
2016. The rise in inflation has put the spotlight on interest rates
although it is still very much expected that these will remain
close to the historical low levels experienced since the financial
crisis for a prolonged period.
Against this economic background, the real estate sector has
held up well. The Company’s benchmark, (MSCI/IPD Quarterly version
of Monthly Index) delivered a total return of 4.5% over the first
six months of 2017 with both market conditions and sentiment
stabilising over the period following the volatility experienced
after the EU Referendum in 2016.
Performance
The Company produced a NAV total return of 6.6% over the six
months to 30 June 2017 driven by the
property portfolio which has continued the outperformance that has
been delivered over recent years. The portfolio total return was
5.6% which compares favourably to the benchmark return referred to
above with both the capital and income returns from the portfolio
delivering above benchmark levels. Capital return of 2.2% was
driven by strong returns from the Company’s industrial assets, the
best performing sector of the market and an area where the
portfolio is 25% overweight compared to the benchmark. The property
income return was relatively stable at 3.3% for the period which
bodes well in an environment where income returns are expected to
be the main driver of performance going forward. It should also be
highlighted that, over the longer term, the Company has
consistently produced attractive returns with a NAV total return of
93.3% over five years, again driven by a portfolio which has
produced a total return of 68.6% over the same period compared to
the benchmark total return of 57.6%.
The share price total return for the six months was 6.0%, above
that of both the FTSE All-Share Index (5.5%) and the FTSE All-Share
REIT Index (3.5%). This return resulted in the premium at which the
Company’s shares trade above net asset value being 6.4% as at 30
June. Over a five year period the shares have produced a total
return of 92.2%, again outperforming the FTSE All-Share Index
(65.2%) and the FTSE All -Share REIT Index (78.3%).
As mentioned in the Annual Report, in order to ensure that the
premium does not become excessive, the Company has issued shares
under a blocklisting facility. Up to 23 August, 11.425 million
shares had been issued under this blocklisting facility raising
£9.9 million, all at prices that are accretive to NAV per share for
existing shareholders.
Dividends
The Company has paid out dividends totalling 2.380p per share
for the six month period. This equates to an annual dividend yield
of 5.3% based on the share price as at 30
June 2017, significantly above the yield on the FTSE
All-Share Index and FTSE All-Share REIT Index (both 3.6%). It
should also be highlighted that the dividend paid by the Company is
fully covered, with dividend cover for the six month period
(excluding one-off dilapidation receipts) of 103%. This was
achieved despite net property sales of £22.3m in the period and is
testament to the successful asset management activity undertaken by
the Investment Manager.
Borrowings
In April 2016, the Company
restructured its debt to include a revolving credit facility
(“RCF”) in addition to a term loan. This introduced flexibility
into the capital structure and has proved to be invaluable in
providing the Investment Manager the ability tactically to increase
or decrease the level of debt as both purchase or sales
opportunities arise. This is demonstrated by the fact that, at the
period end, the Company’s LTV was a prudent 19.9% (31 Dec 2016 : 26.0%) as the proceeds from the
£22.3 million of net sales referred to above were used to repay all
of the Company’s RCF. Since then the RCF has been utilised a number
of times to acquire investments and then subsequently reduced as
planned sales were executed. As at 23 August, the LTV was 23.6% at
an attractive interest rate of 2.73%.
Investment Manager
The Board notes the recently completed merger between Standard
Life and Aberdeen Asset Management. It is too early in the
integration process of the two companies to comment on what, if
any, implications this will have for the Company. The Board
continues to monitor developments very closely.
Outlook
The political uncertainty that has surrounded the UK since the
EU referendum vote has been ramped up with the result of the UK
general election. The focus for the next few years will undoubtedly
be on the twists and turns in the Brexit negotiations and what this
may mean for politics in the UK. However, while the economy has so
far managed to shrug off this unprecedented level of uncertainty,
there can be no doubt that the devaluation of the pound following
the Brexit vote has led to an increase in the rate of inflation and
has hit consumer confidence. The benefits for manufacturing of a
lower pound have taken longer to come through which has also
contributed to the slowdown in the economy. With UK GDP growth
forecasts for 2017 and 2018 now being pared back, how the UK
economy reacts to the ongoing political uncertainty combined with
inflationary pressures and the implications this may have for
interest rates will determine the extent of the slowdown.
In relation to the UK real estate market, normality has returned
following the volatility experienced after the EU referendum vote
with the sector continuing to provide a yield profile that is
attractive when compared to other asset classes. Looking forward,
the fundamentals of the sector remain robust with lending to the
sector at a lower level than in 2007/2008, relatively limited
development and vacancy levels which are below the long term
average. Furthermore, unlike in the Financial Crisis, liquidity
remains reasonable. In this environment, the steady secure income
component, with a yield that continues to provide a significant
margin compared to other asset classes, is likely to be the key
driver of returns going forward.
Against this background your Company’s portfolio is well
positioned. While properties of a more secondary nature may
experience more volatility in the current risk averse environment,
the portfolio is well diversified in terms of sector coverage with
a bias towards industrials which is expected to be the best
performing sector over the medium term. From a geographic point of
view, the portfolio has no exposure to the City of London, forecast to be one of the
weakest markets due to the uncertainties over how Brexit will
affect the financial services industry. Finally, although void
rates have increased over the period, the portfolio still produces
an above benchmark income return which, combined with a strong
tenant base and strong rent collection profile, underpins the
Company’s attractive dividend yield in a world where income is
still very much in demand. With a debt structure that remains
prudent while providing the resource and flexibility to act quickly
should opportunities arise and an Investment Manager which has a
proven track record of delivering above benchmark returns, I
continue to believe that your Company is well placed to meet the
challenges that lie ahead.
Robert
Peto
Chairman
30 August 2017
PRINCIPAL RISKS AND UNCERTAINTIES
The Board ensures that proper consideration of risk is
undertaken in all aspects of the Company’s business on a regular
basis. During the period, the Board carried out an assessment of
the risk profile of the Company, including consideration of risk
appetite, risk tolerance and risk strategy. The Board regularly
reviews the principal risks of the Company, seeking assurance that
these risks are appropriately rated and that appropriate risk
mitigation is in place.
The Company’s assets consist of direct investments in UK
commercial property. Its principal risks are therefore related to
the commercial property market in general, but also the particular
circumstances of the properties in which it is invested, and their
tenants. The Board and Investment Manager seek to mitigate these
risks through a strong initial due diligence process, continual
review of the portfolio and active asset management initiatives.
All of the properties in the portfolio are insured, providing
protection against risks to the properties and also protection in
case of injury to third parties in relation to the properties.
The Board has also identified a number of other specific risks
that are reviewed at each Board meeting. These are as follows:
-
The Company and its objectives become unattractive to investors,
leading to a widening discount.
This risk is mitigated through regular contact with
shareholders, a regular review of share price performance and the
level of the discount or premium at which the shares trade to NAV
and regular meetings with the Company’s broker to discuss these
points and address any issues that arise.
-
Net revenues fall such that the Company cannot sustain its level of
dividend, for example due to tenant failure or inability to let
properties.
This risk is mitigated through regular review of forecast
dividend cover and regular review of tenant mix, risk and profile.
Due diligence work on potential tenants is undertaken before
entering into new lease arrangements and tenants are kept under
constant review through regular contact and various reports both
from the managing agents and the Investment Manager’s own reporting
process. Contingency plans are put in place at units that have
tenants that are believed to be in financial trouble. The Company
subscribes to the IPD Iris Report which updates the credit and risk
ranking of the tenants and income stream, and compares it to the
rest of the UK real estate market.
-
Uncertainty or change in the macroeconomic environment results in
property becoming an undesirable asset class, causing a decline in
property values.
This risk is managed through regular reporting from, and
discussion with, the Investment Manager and other advisors.
Macroeconomic conditions form part of the decision making process
for purchases and sales of properties and for sector allocation
decisions.
The Board continues to closely monitor progress with the UK’s
exit from the EU, the effect this may have on property values and
the impact of any resultant regulatory changes that may affect the
Company.
-
Breach of loan covenants.
This risk is mitigated by the Investment Manager monitoring the
loan covenants on a regular basis and providing a quarterly
certificate to the bank confirming compliance with the covenants.
Compliance is also reviewed by the Board each quarter and there is
regular dialogue between the Investment Manager and the bank on
Company activity and performance.
-
Loss on financial instruments.
The Company has entered into an interest rate swap arrangement.
This swap instrument is valued and monitored on a daily basis by
the counterparty bank. The Investment Manager checks the valuation
of the swap instrument internally to ensure this is accurate. In
addition, the credit rating of the bank that the swap is taken out
with is assessed regularly.
Other risks faced by the Company include the following:
-
Strategic – incorrect strategy, including sector and property
allocation and use of gearing, could all lead to poor return for
shareholders.
-
Tax efficiency – the structure of the Company or changes to
legislation could result in the Company no longer being a tax
efficient investment vehicle for shareholders.
-
Regulatory – breach of regulatory rules could lead to the
suspension of the Company’s Stock Exchange Listing, financial
penalties or a qualified audit report.
-
Financial – inadequate controls by the Investment Manager or third
party service providers could lead to misappropriation of assets.
Inappropriate accounting policies or failure to comply with
accounting standards could lead to misreporting or breaches of
regulations.
-
Operational – failure of the Investment Manager’s accounting
systems or disruption to the Investment Manager’s business, or that
of third party service providers, could lead to an inability to
provide accurate reporting and monitoring, leading to loss of
shareholder confidence.
-
Economic – inflation or deflation, economic recessions and
movements in interest rates could affect property valuations and
also bank borrowings.
The Board seeks to mitigate and manage all risks through
continual review, policy setting and enforcement of contractual
obligations. It also regularly monitors the investment environment
and the management of the Company’s property portfolio, levels of
gearing and the overall structure of the Company.
INVESTMENT MANAGER’S REPORT
UK Real Estate Market
The resilience of the UK economy post the EU referendum vote in
2016 has started to fade in 2017. A weaker consumer sector,
impacted by a squeeze on spending power, caused the economy to grow
by only 0.3% in the second quarter of 2017, a pronounced slowdown
from the 0.7% growth recorded in Q4 2016. Expectations are for
slower growth in 2017 compared to 2016. Although economic growth is
moderating, the property sector (as measured by MSCI/IPD) recorded
a reasonable total return of 4.8% over the first six months of
2017. Market conditions and sentiment have stabilised in recent
months following the capital decline after the referendum. Capital
values rose by 2.0% in the first six months of 2017 and rents also
grew by 0.7% over this timeframe. As for the equity markets, total
returns from the FTSE All Share and the FTSE 100 were 5.5% and 4.7%
respectively over the period. For listed real estate equities,
total returns were 4.0% over the first six months of 2017.
As was the case in 2016, the Industrial sector remained the best
performing of the main sectors, driven predominantly by the
logistics market. Retail recorded a 3.6% total return in the first
six months of 2017 compared to 3.7% for offices. Industrials though
had a total return of 8.6% in the first half of 2017. Industrial
values rose by 5.7% from the end of December
2016 to the end of June 2017.
Retail capital growth continued to be the weakest with values
rising by 0.6% p.a. over the first six months of the year, whilst
office values rose by 1.3%. In line with the strong returns for
industrials, the sector also recorded the strongest rental growth
over the last six months at 2.0%. This compares to 0.4% and 0.2%
rental growth respectively for offices and retail over this
period.
Investment Outlook
UK real estate continues to provide an elevated yield compared
to other assets and the market has stabilised following the post
Brexit upheaval last year. Furthermore, lending to the sector is at
a lower level than in the Financial Crisis of 2007/2008 and
liquidity remains reasonable. Additionally, development continues
to be relatively constrained by historic standards, and existing
vacancy rates are below average levels in most markets, which
should all help to maintain the positive returns the sector is
currently recording. In this environment, the steady and
predictable income component generated by the asset class is likely
to be the key driver of returns going forward. The market is likely
to continue to be sentiment driven in the short term as the
politics and economic impact associated with the UK’s withdrawal
from the EU continue to evolve. The retail sector continues to face
a series of headwinds that may hold back recovery in weaker
locations due to oversupply and structural issues. Given the
backdrop of continued macro uncertainty, investors are becoming
more risk averse and better quality assets are once again broadly
outperforming those of poorer quality.
Performance
Given the nature of the underlying asset class and the Company
you are invested in, it is important to look at performance at four
levels; the underlying portfolio versus a property benchmark, the
NAV total return against the peer group, the share price total
return against the market and real estate companies, and finally,
given the income focus of the Company, the dividend yield.
Portfolio level performance
Over the six month reporting period, the Company’s underlying
investment portfolio of UK commercial real estate has performed
well, with a total return of 5.6% against the IPD/ MSCI quarterly
version of monthly valued funds benchmark of 4.5%. The Company’s
portfolio has also performed well over longer time periods, with
top quartile performance over one, five and ten years against the
benchmark.
NAV performance
The Company has a strong NAV total return track record over most
time periods. The main influences on the NAV total return are the
impact of the interest rate swap, the impact of gearing and, of
course, the performance of the underlying portfolio.
Share Price Total return
Of all the measures reported here, the share price total return
is the one the investment manager has the least control over. Your
Company has consistently traded on a greater premium than the
sector average over the reporting period, to some extent reflecting
the level of dividends paid and longer term performance.
Dividend
The Company’s main focus is on providing its investors with an
attractive income return. In order to do this, with the discipline
of a covered dividend policy, it is important that the Company
maintains a high income level from its portfolio.
Based on the share price at 30 June (89.25p) and the annualised
dividend of 4.76p the dividend yield was 5.3%, which compares
favourably to the yield on the FTSE All-Share REIT Index (3.6%) and
the FTSE All-Share Index (3.6%) as at the same date.
Over the reporting period the Company had a dividend cover of
111% (103% excluding non-recurring income).
Portfolio Valuation
The portfolio is valued quarterly. Since the acquisition of the
Pearl portfolio in December 2015 the
Company had two valuers, with JLL valuing the original portfolio,
and Knight Frank the Pearl portfolio. For 30
June 2017 and thereafter Knight Frank will be the sole
valuer to improve efficiency.
As at 30 June 2017 the portfolio
comprised 56 properties valued at a total of £418.1 million with a
cash balance of £26.7 million. This compares to 60 assets, valued
at £450.1 million and cash of £18.3 million as at 30 June 2016.
Investment Strategy
The Company remains focused on delivering an attractive income
to investors through investing in a diversified portfolio of UK
commercial real estate assets. We target assets that are well
located and are in good condition, which we believe will appeal to
occupiers. We aim to actively manage the assets to renew and extend
leases to give the Company a sustainable income to support its
covered dividend policy.
With continued uncertainty in capital markets, and an
expectation tenant demand could dampen over the next 12 months
given the ongoing Brexit negotiations, we are focused on
understanding our tenants’ requirements and trying to address lease
events early. If we believe a property will appeal to other
investors and has a significant void risk or capex requirement then
we will consider a sale to reduce that risk, however we still
believe that having good quality buildings in strong locations
means we can retain tenants and increase income.
Portfolio Allocation
The Company is invested in a portfolio of commercial real estate
assets that provide it with diversification by asset, sector,
geography and income source.
As the Company has a focus on providing an attractive income
yield it is currently overweight in industrials and underweight in
retail. The underlying reason for this position is that only prime
retail is likely to perform as fundamental shifts in retail habits
means the sector is very over supplied with rental values likely to
fall, if replacement tenants can be found at all. Although prime
retail will do well, it is very low yielding (circa 4.25%) and so
does not support the Company’s covered dividend. The office sector
remains attractive, although we have gone underweight in
Central London with the Company
selling its largest asset in March
2017 as we believe London
is a market that is most likely to be adversely affected by Brexit.
When investing in the office market we favour vibrant towns and
city centre locations, with good Universities, and supportive
public transport with nearby housing. We are less keen on out of
town business parks. The overweight position in industrials has
benefited the Company, and is likely to continue to do so in the
short to medium term, but even then it is important to identify
units that meet tenants’ locational and operational needs.
Investment Activity
Purchases
During the reporting period the Company completed on two
industrial purchases:
-
Kings Park Bristol – a multi let industrial estate close to the
city centre purchased for £5.3 million, an initial yield of
6.4%
-
Snop Sunderland – a single let industrial building located close to
the Nissan plant in Teesside. The unit was bought for £5.5 million
reflecting a yield of 6.3%.
After the reporting period the Company completed the purchase of
three further investments:
-
Pinnacle House Reading – a multi let office close to Reading train
station with prospects for asset management, purchased for £13.1
million, and a yield of 6.75%.
-
Princes St Manchester – a multi let office in a converted listed
mill building close to the city centre and let off very low rents,
purchased for £8.1 million, with a yield of 6.4%.
-
Nexus Point Birmingham – a single let industrial unit close to an
existing holding, and recently let on a new 15 year lease,
purchased for £4.6 million, and a yield of 5.75%.
Sales
The Company completed the sale of three assets in the reporting
period, with three further sales in July and August.
-
White Bear Yard, London – Sold for
£19.0 million. The property was the largest investment in the
Company’s portfolio and the sale was driven by concerns over the
effect of Brexit on the London
office market, combined with reletting risk in 2019 and the impact
on rental values of the rates revaluation in the neighbourhood.
-
Quadrangle Cheltenham – sold for £11.1 million. The property had a
lease expiry in 2018 when the tenant will depart and substantial
capex will be required. The sale, above valuation, was undertaken
to avoid the development and letting risk.
-
Matalan, Bradford – sold for £3.8 million. Although let on a long
lease, decided to reduce Company exposure to regional retail.
-
Travis Perkins Cheltenham – Sold for
£2.2 million in July. This small asset was let on a long lease to
Travis Perkins but the unit was in
poor condition and we agreed a sale, above valuation, that gives
the tenant the ability to demolish the unit and rebuild as it sees
fit.
-
IT Centre York – Sold for £4.4 million in August. This out of town
office was let on a short lease and we were not confident of
reletting or rental prospects, and so sold at a premium to
valuation.
-
The Range, Southend-on-Sea – Sold
for £5.0 million in August. The sale was to the local Council and
realised a profit that we were not confident could be achieved
through future asset management.
Asset Management
In a period where income returns are a significant contributor
to the total return it is important to concentrate on asset
management. In the first half of the year the sales were part of
reducing risk in the portfolio. However, ongoing there are also a
number of assets being prepared for refurbishment where we want to
be able to take on the letting risk at expiry as we believe the
assets will perform well in the future.
Although voids increased during the reporting period to 6.7%,
this level is still below the IPD market average. We completed
seven lettings over the period, for a total rent of £519,000pa, and
agreed terms to sell the largest void. The main increase in the
void level was from three lease expiries at the end of the
reporting period. We are refurbishing these units, or have strong
interest in their current condition to relet them.
In addition, we have been able to settle a number of rent
reviews at an uplift to the old rent – a total of seven reviews
were settled.
Borrowings
The Company has two debt facilities from RBS. The first is a
£110m term loan, which is due to expire in April 2023, and a revolving credit facility (RCF)
of £35 million, which expires in April
2021 but with options to extend.
As at the reporting date and 23 August
2017 the RCF was undrawn, however inbetween it was used to
help finance recent purchases.
As at 30 June the LTV for the Company was 19.9% (with a bank
covenant of 60%). The all in interest rate cost at that date was
2.73%.
Health and Safety
Following the tragic events of the Grenfell Tower the investment
manager, like most real estate investors, undertook a review of its
managed assets. Your Company does not own any assets that caused a
concern from the review, as it does not invest in high rise, or
residential assets, and where it has multi let assets they all have
a thorough Health and Safety audit in place.
Jason
Baggaley
Fund Manager
DIRECTORS’ RESPONSIBILITY
STATEMENT
The Directors are responsible for preparing the Interim
Management Report in accordance with applicable law and
regulations. The Directors confirm that to the best of their
knowledge:
- The condensed Unaudited Consolidated Financial Statements have
been prepared in accordance with IAS 34; and
- The Interim Management Report includes a fair review of the
information required by 4.2.7R and 4.2.8R of the Financial Conduct
Authority’s Disclosure and Transparency Rules.
- In accordance with 4.2.9R of the Financial Conduct Authority’s
Disclosure and Transparency Rules, it is confirmed that this
publication has not been audited or reviewed by the Company’s
auditors.
The Interim Report, for the six months ended 30 June 2017, comprises an Interim Management
Report in the form of the Chairman’s Statement, the Investment
Manager’s Report, the Directors’ Responsibility Statement and a
condensed set of Unaudited Consolidated Financial Statements.
The Directors each confirm to the best of their knowledge
that:
a. the Unaudited Consolidated Financial
Statements, prepared in accordance with IFRSs as adopted by the
European Union, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group;
and
b. the Interim Report includes a fair
review of the development and performance of the business and the
position of the Group, together with a description of the principal
risks and uncertainties faced.
For and on behalf of the Directors of Standard Life Investments
Property Income Trust Limited
Robert
Peto
Chairman
30 August 2017
UNAUDITED FINANCIAL STATEMENTS
Unaudited Consolidated Statement
of Comprehensive Income |
|
|
|
|
for the period ended
30 June 2017 |
|
1 Jan 17 to 30 Jun
17 |
1 Jan 16 to 30 Jun
16 |
1 Jan 16 to 31 Dec
16 |
|
Notes |
£ |
£ |
£ |
Rental income |
|
14,794,656 |
14,918,244 |
30,414,862 |
Surrender premium income |
|
- |
- |
81,500 |
Valuation gain/(loss) from
investment properties |
3 |
9,501,318 |
2,716,962 |
(5,300,992) |
(Loss)/gain on disposal of
investment properties |
|
(470,987) |
94,361 |
1,067,395 |
Investment management fees |
2 |
(1,536,615) |
(1,620,379) |
(3,157,399) |
Valuers’ fees |
|
(34,686) |
(53,745) |
(99,001) |
Audit fees |
|
(34,622) |
(45,714) |
(73,695) |
Directors’ fees and subsistence |
|
(97,315) |
(75,326) |
(164,225) |
Other direct property expenses
|
|
(976,737) |
(526,659) |
(1,372,597) |
Other administration expenses |
|
(232,431) |
(226,067) |
(445,144) |
Operating profit |
|
20,912,581 |
15,181,677 |
20,950,704 |
|
|
|
|
|
Finance income |
|
746 |
16,103 |
30,536 |
Finance costs |
|
(1,670,820) |
(2,341,813) |
(4,047,594) |
Loss on derecognition of interest
rate swaps |
|
- |
(2,735,000) |
(2,735,000) |
Profit for the period before
taxation |
|
19,242,507 |
10,120,967 |
14,198,646 |
|
|
|
|
|
Taxation |
|
|
|
|
Tax charge |
|
- |
- |
- |
Profit for the period, net of
tax |
|
19,242,507 |
10,120,967 |
14,198,646 |
|
|
|
|
|
Other Comprehensive
Income |
|
|
|
|
Net change in fair value of the swap
reclassified to profit and loss |
|
- |
2,735,000 |
2,735,000 |
Valuation gain/(loss) on interest
rate swap |
|
969,520 |
(6,078,345) |
(4,212,250) |
Total other comprehensive
Income/(loss) |
|
969,520 |
(3,343,345) |
(1,477,250) |
|
|
|
|
|
Total comprehensive income for
the period, net of tax |
|
20,212,027 |
6,777,622 |
12,721,396 |
|
|
|
|
|
Earnings per share: |
|
Pence |
pence |
pence |
Basic and diluted
earnings per share |
5 |
4.98 |
2.66 |
3.73 |
Adjusted (EPRA) earnings per
share |
|
2.64 |
2.64 |
5.56 |
All items in the above Unaudited Consolidated Statement of
Comprehensive Income derive from continuing operations.
Unaudited Consolidated Balance
Sheet |
|
|
|
|
as at 30 June 2017 |
|
30 Jun 17 |
30 Jun 16 |
31 Dec 16 |
|
Notes |
£ |
£ |
£ |
ASSETS |
|
|
|
|
Non-current
assets |
|
|
|
|
Investment properties |
3 |
385,014,067 |
437,297,884 |
395,782,781 |
Lease incentives |
3 |
3,965,933 |
3,267,928 |
4,187,219 |
|
|
388,980,000 |
440,565,812 |
399,970,000 |
Current assets |
|
|
|
|
Investment properties held for
sale |
4 |
29,080,000 |
8,886,675 |
29,975,000 |
Trade and other receivables |
|
2,858,245 |
2,900,839 |
2,723,757 |
Cash and cash equivalents |
|
26,685,541 |
18,257,372 |
13,054,057 |
|
|
58,623,786 |
30,044,886 |
45,752,814 |
|
|
|
|
|
Total assets |
|
447,603,786 |
470,610,698 |
445,722,814 |
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
|
8,425,360 |
12,804,358 |
8,784,217 |
Interest rate swap |
8 |
1,040,745 |
990,627 |
1,341,101 |
|
|
9,466,105 |
13,794,985 |
10,125,318 |
|
|
|
|
|
Non-current liabilities |
|
|
|
|
Bank borrowings |
9 |
109,075,233 |
140,389,061 |
124,001,828 |
Interest rate swap |
8 |
1,552,277 |
4,438,010 |
2,221,441 |
Rent deposits due to tenants |
|
1,162,161 |
434,425 |
936,668 |
|
|
111,789,671 |
145,261,496 |
127,159,937 |
|
|
|
|
|
Total liabilities
|
|
121,255,776 |
159,056,481 |
137,285,255 |
|
|
|
|
|
Net
assets |
|
326,348,010 |
311,554,217 |
308,437,559 |
|
|
|
|
|
EQUITY |
|
|
|
|
Capital and reserves attributable
to Company’s equity holders |
|
|
|
|
Share capital |
|
211,762,335 |
204,820,219 |
204,820,219 |
Retained earnings |
|
8,500,932 |
5,470,281 |
7,532,448 |
Capital reserves |
|
8,246,371 |
3,425,345 |
(1,753,480) |
Other distributable reserves |
|
97,838,372 |
97,838,372 |
97,838,372 |
Total equity |
|
326,348,010 |
311,554,217 |
308,437,559 |
|
|
|
|
|
NAV per share |
|
|
|
|
NAV |
|
83.9 |
81.8 |
81.0 |
EPRA NAV |
|
84.6 |
83.3 |
82.0 |
Unaudited Consolidated Statement
of Changes in Equity |
|
|
|
|
|
|
for the period ended 30 June
2017 |
|
Share Capital |
Retained earnings |
Capital reserves |
Other distributable
reserves |
Total equity |
|
Notes |
£ |
£ |
£ |
£ |
£ |
Opening balance 1 January
2017 |
|
204,820,219 |
7,532,448 |
(1,753,480) |
97,838,372 |
308,437,559 |
|
|
|
|
|
|
|
Profit for the period |
|
- |
19,242,507 |
- |
- |
19,242,507 |
Other comprehensive income |
|
- |
- |
969,520 |
- |
969,520 |
Total comprehensive
income for the period |
|
- |
19,242,507 |
969,520 |
- |
20,212,027 |
|
|
|
|
|
|
|
Ordinary shares issued net of issue
costs |
|
6,942,116 |
- |
- |
- |
6,942,116 |
Dividends paid |
7 |
- |
(9,243,692) |
- |
- |
(9,243,692) |
Valuation gain from investment
properties |
3 |
- |
(9,501,318) |
9,501,318 |
- |
- |
Loss on disposal of investment
properties |
|
- |
470,987 |
(470,987) |
- |
- |
Balance at 30 June
2017 |
|
211,762,335 |
8,500,932 |
8,246,371 |
97,838,372 |
326,348,010 |
Unaudited Consolidated Statement of Changes in Equity |
|
|
|
|
|
|
for the period ended 30 June
2016 |
|
Share Capital |
Retained earnings |
Capital reserves |
Other distributable
reserves |
Total equity |
|
Notes |
£ |
£ |
£ |
£ |
£ |
Opening balance 1 January
2016 |
|
204,820,219 |
6,167,329 |
3,957,367 |
97,838,372 |
312,783,287 |
|
|
|
|
|
|
|
Profit for the period |
|
- |
10,120,967 |
- |
- |
10,120,967 |
Other comprehensive income |
|
- |
- |
(3,343,345) |
- |
(3,343,345) |
Total comprehensive
income for the period |
|
- |
10,120,967 |
(3,343,345) |
- |
6,777,622 |
|
|
|
|
|
|
|
Dividends paid |
7 |
- |
(8,006,692) |
- |
- |
(8,006,692) |
Valuation gain from investment
properties |
|
- |
(2,716,962) |
2,716,962 |
- |
- |
Profit on disposal of investment
properties |
|
- |
(94,361) |
94,361 |
- |
- |
Balance at 30 June
2016 |
|
204,820,219 |
5,470,281 |
3,425,345 |
97,838,372 |
311,554,217 |
Unaudited Consolidated Statement
of Changes in Equity |
|
|
|
|
|
|
for the year ended
31 December 2016 |
|
Share Capital |
Retained earnings |
Capital reserves |
Other distributable
reserves |
Total equity |
|
Notes |
£ |
£ |
£ |
£ |
£ |
Opening balance 1 January
2016 |
|
204,820,219 |
6,167,329 |
3,957,367 |
97,838,372 |
312,783,287 |
|
|
|
|
|
|
|
Profit for the year |
|
- |
14,198,646 |
- |
- |
14,198,646 |
Other comprehensive income |
|
- |
- |
(1,477,250) |
- |
(1,477,250) |
Total comprehensive
income for the year |
|
- |
14,198,646 |
(1,477,250) |
- |
12,721,396 |
|
|
|
|
|
|
|
Dividends paid |
7 |
- |
(17,067,124) |
- |
- |
(17,067,124) |
Valuation loss from investment
properties |
|
- |
5,300,992 |
(5,300,992) |
- |
- |
Profit on disposal of investment
properties |
|
- |
(1,067,395) |
1,067,395 |
- |
- |
Balance at 31
December 2016 |
|
204,820,219 |
7,532,448 |
(1,753,480) |
97,838,372 |
308,437,559 |
Unaudited Consolidated Cash Flow
Statement |
|
|
|
|
for the period ended 30 June
2017 |
|
1 Jan 17 to 30 Jun
17 |
1 Jan 16 to 30 Jun
16 |
1 Jan 16 to 31 Dec
16 |
|
Notes |
£ |
£ |
£ |
Cash flows from operating
activities |
|
|
|
|
Profit for the period/year before
taxation |
|
19,242,507 |
10,120,967 |
14,198,646 |
Movement in non-current lease
incentives |
|
41,416 |
(189,660) |
(816,862) |
Movement in trade and other
receivables |
|
(134,488) |
(41,988) |
135,094 |
Movement in trade and other
payables |
|
(133,364) |
(297,315) |
(3,690,397) |
Loss on derecognition of interest
rate swaps
|
|
- |
2,735,000 |
2,735,000 |
Finance costs |
|
1,670,820 |
2,341,813 |
4,047,594 |
Finance income |
|
(746) |
(16,103) |
(30,536) |
Valuation (gain)/loss from
investment properties |
3 |
(9,501,318) |
(2,716,962) |
5,300,992 |
Loss/(gain) on disposal of
investment properties |
3 |
470,987 |
(94,361) |
(1,067,395) |
Net cash inflow from operating
activities |
|
11,655,814 |
11,841,391 |
20,812,136 |
|
|
|
|
|
Cash flows from investing
activities |
|
|
|
|
Interest received |
|
746 |
16,103 |
30,536 |
Purchase of investment
properties |
3 |
(11,285,362) |
- |
- |
Capital expenditure on investment
properties |
3 |
(1,394,736) |
(888,612) |
(1,479,788) |
Net proceeds from disposal of
investment properties |
|
33,554,013 |
6,219,361 |
20,192,395 |
Net cash inflow from investing
activities |
|
20,874,661 |
5,346,852 |
18,743,143 |
|
|
|
|
|
Cash flows from financing
activities |
|
|
|
|
Proceeds on issue of ordinary
shares |
|
6,994,575 |
- |
- |
Transaction costs of issue of
shares |
|
(52,459) |
- |
- |
Repayment of bank borrowing |
|
- |
- |
(139,432,692) |
Bank borrowing |
|
- |
1,340,213 |
145,000,000 |
Repayment of RCF |
|
(15,000,000) |
- |
(20,000,000) |
Bank borrowing arrangement
costs |
|
- |
- |
(1,138,458) |
Interest paid on bank borrowing |
|
(1,052,219) |
(1,476,865) |
(2,594,070) |
Payments on interest rate swap |
|
(545,196) |
(448,043) |
(929,394) |
Swap breakage costs |
|
- |
(2,735,000) |
(2,735,000) |
Dividends paid to the Company’s
shareholders |
7 |
(9,243,692) |
(8,006,692) |
(17,067,124) |
Net cash outflow from financing
activities |
|
(18,898,991) |
(11,326,387) |
(38,896,738) |
|
|
|
|
|
Net increase in cash and cash
equivalents |
|
13,631,484 |
5,861,856 |
658,541 |
Cash and cash equivalents at
beginning of period/year |
|
13,054,057 |
12,395,516 |
12,395,516 |
Cash and cash equivalents at end
of period/year |
|
26,685,541 |
18,257,372 |
13,054,057 |
Notes to the Unaudited Consolidated
Financial Statements
for the period ended 30 June 2017
1 Accounting Policies
The Unaudited Consolidated Financial Statements have been
prepared in accordance with International Financial Reporting
Standard (“IFRS”) IAS 34 ‘Interim Financial Reporting’ and, except
as described below, the accounting policies set out in the
statutory accounts of the Group for the year ended 31 December 2016. The condensed Unaudited
Consolidated Financial Statements do not include all of the
information required for a complete set of IFRS financial
statements and should be read in conjunction with the Consolidated
Financial Statements of the Group for the year ended 31 December 2016, which were prepared under full
IFRS requirements.
2 Related Party Disclosures
Parties are considered to be related if one party has the
ability to control the other party or exercise significant
influence over the other party in making financial or operational
decisions.
Investment manager
Under the terms of the current Investment Management Agreement
(“IMA”), the Investment Manager is entitled to receive fees of
0.75% of total assets up to £200million; 0.70% of total assets
between £200million and £300million; and 0.65% of total assets in
excess of £300million. The total fees charged for the period ended
30 June 2017 amounted to £1,536,615
(period ended 30 June 2016:
£1,620,379). The total amount due and payable at the period end
amounted to £775,590 excluding VAT (period ended 30 June 2016: £807,041 excluding VAT).
3 Investment Properties
Country
|
UK |
UK |
UK |
|
Class |
Industrial |
Office |
Retail |
Total |
|
30 Jun 17 |
30 Jun 17 |
30 Jun 17 |
30 Jun 17 |
|
£ |
£ |
£ |
£ |
Market value at 1 January |
181,735,000 |
150,475,000 |
97,735,000 |
429,945,000 |
Purchase of investment
properties |
11,285,362 |
- |
- |
11,285,362 |
Capital expenditure on investment
properties |
1,291,505 |
- |
103,231 |
1,394,736 |
Opening market value of disposed
investment properties |
- |
(29,975,000) |
(4,050,000) |
(34,025,000) |
Valuation gain from investment
properties |
6,089,855 |
3,366,437 |
45,026 |
9,501,318 |
Movement in lease incentives
receivable |
128,278 |
(216,437) |
46,743 |
(41,416) |
Market value at 30 June
|
200,530,000 |
123,650,000 |
93,880,000 |
418,060,000 |
|
|
|
|
|
Investment properties recognised as
held for sale |
(7,850,000) |
(12,050,000) |
(9,180,000) |
(29,080,000) |
Market value net of held for sale
at 30 June |
192,680,000 |
111,600,000 |
84,700,000 |
388,980,000 |
|
|
|
|
|
Adjustment for lease incentives |
(849,376) |
(1,813,515) |
(1,303,042) |
(3,965,933) |
Carrying value at 30 June
|
191,830,624 |
109,786,485 |
83,396,958 |
385,014,067 |
The market value of the investment properties provided by Knight
Frank LLP at 30 June 2017 was
£418,060,000 (30 June 2016:
£450,051,000); however an adjustment has been made for lease
incentives of £3,965,933 (30 June
2016: £3,557,116) that are already accounted for as an
asset.
In the consolidated Cash Flow Statement, (loss)/gain from
disposal of investment properties comprise:
|
1 Jan 17 to 30 Jun
17 |
1 Jan 16 to 30 Jun
16 |
1 Jan 16 to 31 Dec
16 |
|
£ |
£ |
£ |
Net proceeds from disposed
investment properties |
33,554,013 |
6,219,361 |
20,192,395 |
Less: opening market value of
disposed investment properties |
(34,025,000) |
(6,125,000) |
(19,125,000) |
(Loss)/gain on disposal of
investment properties |
(470,987) |
94,361 |
1,067,395 |
4 Investment Properties Held For
Sale
As at 30 June 2017 the Group was
actively seeking a buyer for the following six properties:
- Matalan, Kings Lynn
- Travis Perkins, Cheltenham
- Unit 6, Broadgate, Oldham
- The IT Centre, York Science Centre
- The Kirkgate, Epsom
- The Range, Southend-on-Sea
The Group completed the sale of Travis
Perkins, Cheltenham on 26 July
2017 for a price of £2.175 million, the sale of The IT
Centre, York Science Centre on 4 August
2017 for a price of £4.35 million and the sale of The Range,
Southend-on-Sea on 18 August 2017 for a price of £5 million.
5 Earnings Per Share
The earnings per Ordinary share are based on the net profit for
the period of £19,242,507 (30 June
2016: £10,120,967) and 386,333,375 (30 June 2016: 380,690,419) ordinary shares, being
the weighted average number of shares in issue during the
period.
Earnings for the period to 30 June
2017 should not be taken as a guide to the results for the
year to 31 December 2017.
6 Investment In Subsidiary
Undertakings
The Company owns 100 per cent of the issued ordinary share
capital of Standard Life Investments Property Holdings Limited, a
company with limited liability incorporated and domiciled in
Guernsey, Channel Islands, whose principal business is
property investment.
The Group, through its subsidiary, owns 100 per cent of the
issued share capital of Huris (Farnborough) Limited, a company
incorporated in the Cayman Islands
whose principal business is property investment. During the period
ended 30 June 2017 the Group
initiated the process to liquidate Huris (Farnborough) Limited.
The group undertakings consist of the following 100% owned
subsidiaries at the Balance Sheet Date:
-Standard Life Investments Property Holdings Limited, a company
with limited liability incorporated in Guernsey, Channel
Islands.
- Standard Life Investments (SLIPIT) Limited Partnership, a
limited partnership established in England.
-Standard Life Investments SLIPIT (General Partner) Limited, a
company with limited liability incorporated in England.
-Standard Life Investments SLIPIT (Nominee) Limited, a company
with limited liability incorporated in England.
7 Dividends And Property Income
Distribution Gross Of Income Tax
|
30 Jun 17 |
30 Jun 16 |
31 Dec 16 |
|
£ |
£ |
£ |
Non Property Income
Distributions |
|
|
|
0.561p per ordinary share paid in
March 2016 relating to the quarter ending 31 December 2015 |
- |
1,679,695 |
1,679,695 |
0.84p per ordinary share paid in
March 2017 relating to the quarter ending 31 December 2016 |
3,258,910 |
- |
- |
Property Income
Distributions |
|
|
|
0.600p per ordinary share paid in
March 2016 relating to the quarter ending 31 December
2015 |
- |
1,796,781 |
1,796,781 |
1.19p per ordinary share paid in May
2016 relating to the quarter ending 31 March 2016 |
- |
4,530,216 |
4,530,216 |
1.19p per ordinary share paid in
August 2016 relating to the quarter ending 30 June 2016 |
- |
- |
4,530,216 |
1.19p per ordinary share paid in
November 2016 relating to the quarter ending 30 September 2016 |
- |
- |
4,530,216 |
0.35p per ordinary share paid in
March 2017 relating to the quarter ending 31 December 2016 |
1,357,879 |
- |
- |
1.19p per ordinary share paid in May
2017 relating to the quarter ending 31 March 2017 |
4,626,903 |
- |
- |
|
9,243,692 |
8,006,692 |
17,067,124 |
A property income dividend of 1.19p per share was declared on
9 August 2017 in respect of the
quarter to 30 June 2017 – a total
payment of £4,666,173. This will be paid on 31 August 2017.
8 Financial Instruments and Investment
Properties
Fair values
The fair value of financial assets and liabilities is not
materially different from the carrying value in these financial
statements.
Fair value hierarchy
The following table shows an analysis of the fair values of
investment properties recognised in the balance sheet by the level
of the fair value hierarchy:
30 June 2017 |
Level 1 |
Level 2 |
Level 3 |
Total fair value |
Investment properties |
- |
- |
414,094,067 |
414,094,067 |
The lowest level of input is the underlying yields on each
property which is an input not based on observable market data.
The following table shows an analysis of the fair values of
financial instruments recognised in the balance sheet by the level
of the fair value hierarchy:
30 June 2017 |
Level 1 |
Level 2 |
Level 3 |
Total fair value |
Loan Facilities |
- |
112,064,817 |
- |
112,064,817 |
The lowest level of input is the interest rate payable on each
borrowing which is a directly observable input.
30 June 2017 |
Level 1 |
Level 2 |
Level 3 |
Total fair value |
Interest rate swap |
- |
2,593,022 |
- |
2,593,022 |
The lowest level of input is the three month LIBOR yield curve
which is a directly observable input.
There were no transfers between levels of the fair value
hierarchy during the six months ended 30
June 2017.
Explanation of the fair value
hierarchy:
Level 1 – Quoted (unadjusted) market prices in active markets
for identical assets or liabilities.
Level 2 – Valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly or
indirectly observable.
Level 3 – Valuation techniques for which the lowest level input
that is significant to the fair value measurement is
unobservable.
The fair value of investment properties is calculated using
unobservable inputs as described in the annual report and accounts
for the year ended 31 December
2016.
Sensitivity of measurement to variance
of significant unobservable inputs:
- A decrease in the estimated annual rent will decrease the fair
value.
- An increase in the discount rates and the capitalisation rates
will decrease the fair value.
- There are interrelationships between these rates as they are
partially determined by the market rate conditions.
- The fair value of the derivative interest rate swap contract
is estimated by discounting expected future cash flows using
current market interest rates and yield curves over the remaining
term of the instrument.
- The fair value of the loan facilities are estimated by
discounting expected future cash flows using the current interest
rates applicable to each loan.
9 Bank Borrowings
On 28 April 2016 the Company
entered into a new agreement to extend £145 million of its existing
£155 million debt facility with RBS. The debt facility consists of
a £110 million seven year term loan facility and a £35 million five
year RCF. The RCF may by agreement be extended by one year on two
occasions. During the year to 31 December
2016 £20 million of the RCF was repaid, with the balance of
£15 million remaining drawn down by the Group at 31 December 2016. During the period to
30 June 2017, the remaining £15
million RCF was repaid. Interest is payable on the Term Loan at 3
month LIBOR plus 1.375% and on the RCF at LIBOR plus 1.2%. This
equates to a rate of 2.725% on the Term Loan as at 30 June 2017.
Under the terms of the loan facility there are certain events
which would entitle RBS to terminate the loan facility and demand
repayment of all sums due. Included in these events of default is
the financial undertaking relating to the LTV percentage. The new
loan agreement notes that the LTV percentage is calculated as the
loan amount less the amount of any sterling cash deposited within
the security of RBS divided by the gross secured property value,
and that this percentage should not exceed 60% for the period to
and including 27 April 2021 and
should not exceed 55% after 27 April
2021 to maturity.
10 Events After The Balance Sheet
Date
Purchases
On 7 July 2017, the Group
completed the purchase of Pinnacle, Reading, an office building for
£13.1 million excluding costs.
On 18 July 2017, the Group
completed the purchase of 101 Princess Steet, Manchester for £8.1 million excluding
costs.
On 4 August 2017, the Group
completed the purchase of Nexus Point, Birmingham for £4.6 million excluding
costs.
Sales
On 26 July 2017, the Group sold
Travis Perkins, Cheltenham for £2.2
million.
On 4 August 2017, the Group sold
The IT Centre, York Science Centre for £4.4 million.
On 18 August 2017, the Group sold
The Range, Southend-on-Sea for
£5.0 million.
Dividends
On 9 August 2017, the Company
declared a property income dividend in respect of the quarter to
30 June 2017 of 1.19 pence per share which will be paid on
31 August 2017.
Share Issues
During the period from 1 July 2017
to 23 August 2017 the Group has
raised £2.95 million through the issue of 3.3 million shares.
The Interim Report and Unaudited Consolidated Condensed
Financial Statements for the period from 1
January 2017 to 30 June 2017
will shortly be available for download from the Company’s website
hosted by the Investment Manager (www.slipit.co.uk).
Please note that past performance is not necessarily a guide to
the future and that the value of investments and the income from
them may fall as well as rise. Investors may not get back the
amount they originally invested.
All enquiries to:
The Company Secretary
Northern Trust International Fund Administration Services
(Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL
Tel: 01481 745001
Fax: 01481 745051
Jason Baggaley
Standard Life Investments Limited
Tel: 0131 245 2833
Graeme McDonald
Standard Life Investments Limited
Tel: 0131 245 3151
END