Circle Property PLC Valuation and Trading Update and Disposal (6589D)
October 11 2018 - 2:00AM
UK Regulatory
TIDMCRC
RNS Number : 6589D
Circle Property PLC
11 October 2018
11 October 2018
Circle Property Plc
("Circle" or the "Company")
Valuation and Trading Update and Disposal
Circle Property Plc, the specialist regional UK office
investment and development company, provides the following update
on trading ahead of its interim results for the six months ended 30
September 2018, which will be announced in November 2018.
Portfolio valuation
The Company's continued focus on the active management of its
regional office assets, particularly the leasing of space in its
redevelopment and refurbishment pipeline, has delivered strong
growth in the value of its portfolio of assets during the first
half of the year. As at 30 September 2018 the independent valuation
of the Company's portfolio was GBP124.875 million, up 12.37% on a
like-for-like basis over a six month period since 31 March 2018
(GBP111.125 million). The Company estimates an unaudited NAV of
GBP78.7 million (GBP2.78 per share) as at 30 September 2018, which
represents an 87% growth in NAV since IPO in February 2016.
Highlights include:
-- A total of GBP677,276 has been added to the contracted rental
income resulting in a 9.9% increase to GBP7.506 million (31 March
2018: GBP6.829 million).
-- Construction on the Company's current redevelopment and
refurbishment pipeline is now complete with good interest from
potential tenants.
-- Completion of the acquisition of 710 & 720 Aztec West
Business Park in April 2018 for GBP4.2 million in an off-market
transaction representing a net initial yield of 7.9%. These
offices, which are fully let, add to the Company's income and its
holdings within Bristol's premier business park, where it already
owns No. 135, a fully leased 13,258 sq ft office. Rental growth
across the wider Aztec West Business Park has been positive and the
Company expects to capture this uplift at the imminent rent review
and lease renewal for two of its existing properties on the same
site.
-- Completion of a 15 year lease with BE Offices at Somerset
House in Birmingham, at a contracted rent of GBP795,729 p.a. agreed
within five weeks of the development's completion and taking the
asset to 100% occupancy level.
-- The successful conclusion of a lease renegotiation with a
major tenant at Kents Hill Business Park in Milton Keynes including
the removal of two break clauses at years 15 and 20 in its lease
which has 23 years remaining before expiry and is now RPI
linked.
Disposal
The Company also announces that simultaneous to agreeing a lease
re-gear with the tenant, it has completed the disposal of a
non-core asset on the A303 at Solstice Park in Amesbury, Wiltshire
for GBP3.5 million, representing an 18.6% premium to book value.
Circle acquired the roadside site in 2005, before developing it
into a petrol filling station and convenience store let to
Co-operative Group Food Ltd. The proceeds of the sale will be
reinvested into the Company's refurbishment and acquisition
pipeline.
John Arnold, CEO of Circle Property Plc, commented: "Our careful
stock selection and active asset management strategy continues to
yield results as we report another significant uplift in our
portfolio's valuation at the half year. The regional office markets
in which we operate remain buoyant and we continue to be focused on
growing the Company, expanding the share register and seeking new
acquisition opportunities where we can apply our active asset
management expertise to unlock value for our shareholders.
Furthermore, the sale at Solstice Park will enable us to recycle
capital from a non-core, ex-growth asset into higher yielding
investment opportunities in strong regional office markets, in line
with our strategy."
ENDS
This announcement is inside information for the purposes of
Article 7 of EU Regulation 596/2014.
+44 (0)20 7930
Circle Property Plc 8503
John Arnold, CEO
Edward Olins, COO
+44 (0) 20 7131
Smith & Williamson 4000
Azhic Basirov
Katy Birkin
Radnor Capital
Joshua Cryer +44 (0) 20 3897
Iain Daly 1830
FTI Consulting +44 (0)20 3727 1000
Giles Barrie
Richard Sunderland
Eve Kirmatzis
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END
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