Interim Management Statement and Net Asset Value
February 23 2010 - 10:09AM
UK Regulatory
TIDMIPI
Net Asset Value and Interim Management Statement
The unaudited Adjusted Net Asset Value per share of Invesco Property Income
Trust Limited as at 31 December 2009 was -2.9 pence (30 September 2009: -6.7p).
The unaudited Net Asset Value per share was -16.2 pence (30 September 2009:
-21.1p).
The Net Asset Value per Ordinary Share is calculated under International
Financial Reporting Standards, and the Adjusted Net Asset Value per share in
accordance with the prospectus.
The net asset values incorporate the external valuation of the Group's property
assets as at 31 December 2009.
Analysis of movement in net asset value.
At 31 December At 30 September
2009 2009
Investment Properties
UK (GBPm) 105.2 109.8
Europe (GBPm) 139.3 143.5
Investment Properties (total) 244.5 253.3
Other assets (GBPm) 22.7 25.3
Other liabilities (GBPm) (40.8) (41.4)
Bank borrowings (GBPm) (230.8) (247.4)
Adjusted Net Asset Value (GBPm) (4.4) (10.3)
Adjusted Net Asset Value per (2.9) (6.7)
share (p)
Goodwill (GBPm) 6.1 6.5
Interest rate swaps (GBPm) (14.0) (15.5)
Deferred taxation (GBPm) (12.5) (13.0)
Net Asset Value (GBPm) (24.8) (32.3)
Net Asset Value per share (p) (16.2) (21.1)
Portfolio Valuation
As announced on 7 October 2009, the Company's property portfolios were valued
in aggregate at GBP244.4 million as at 31 December 2009, with approximately 43%
by value of assets located in the UK and 57% in continental Europe. The
underlying like-for-like changes in values over periods to 31 December 2009 are
shown below:
Periods to 31 December 2009
3m 6m 12m
UK portfolio (in Sterling) +5.4% +4.8% -11.0%
European portfolio (in -1.2% -2.5% -9.9%
Euros)
Total (in Sterling) +0.4% +3.9% -14.4%
The portfolio analysis as at 31 December 2009 is shown below:
UK France Belgium Spain Germany Total
Industrial 28.3% 11.1% - 3.5% - 42.9%
Offices 13.4% 25.9% 8.6% - 7.8% 55.7%
Retail 1.3% - - - - 1.3%
Total 43.0% 37.0% 8.6% 3.5% 7.8% 100%
The top ten investments by value are set out below:
Ranking Investment % of Ranking at
Portfolio
Now 30 September
2009
1 Le Directoire, St-Cloud, France 15.6 1
2 St-Michel sur Orge, France 8.4 2
3 SchickardSt, Boeblingen, Germany 7.8 3
4 Le Diapason, Paris, France 6.7 4
5 Colonel Bourg, Brussels, Belgium 5.7 5
6 11 Old Jewry London EC2, UK 4.0 7
7 Priory Business Park, Bedford, UK 3.8 8
8 Mercury Drive, Northampton, UK 3.8 11
9 Le Verdun, Gentilly, France 3.6 10
10 San Esteve Sesrovires, Barcelona, Spain 3.5 9
The gross portfolio yield as at the end of December 2009 was 9.5%, with a
weighted average unexpired lease term of 4.0 years overall, compared to 4.1
years as at the end of September 2009. On a like for like basis the vacancy
rate rose slightly to 8.2%, compared with 7.8% at the end of September 2009 and
6.8% at the end of December 2008.
Transactions
The Company completed the sale of Finsgate House, an office building in London
EC1 for GBP10.55 million, 6.3% ahead of the September valuation.
The Directors are also pleased to announce the sale of Oliver's Place, Fulwood,
Preston, for GBP2,140,000, in line with 31 December 2009 valuation. The
transaction exchanged and completed on 22 February.
The property, which was sold to an owner occupier comprises an industrial
warehouse, which has been vacant and has generated no income since March 2008
following the failure of the occupying business.
The sale will mitigate estimated annual holding costs of GBP310,000 p.a. The net
proceeds of sale will be used to repay bank borrowings.
In deciding whether to proceed with further disposals, the Board will have
regard to the impact of any proposed transactions on the Group's banking
covenants and cash flow.
Asset Management
While the active asset management strategy across the portfolio continues to
focus on securing tenants and filling vacancies, this quarter was one where
much activity has not yet yielded results in terms of signed lease commitments.
The previously agreed letting of 9,647 sqft to Milliman Ltd at Old Jewry
completed following the conclusion of the refurbishment of the space.
Elsewhere, terms were agreed for further lettings at Old Jewry, a lease
extension proposal has been agreed in Paris, and the tenant at Verdun (Ilog)
did not exercise their break option effective 31 December 2009, resulting in a
further 3 year lease term.
It is reassuring that the vacancy rate remains at a relatively low level in
spite of the continuing economic uncertainty across Europe, through successful
asset management, and a very low rate of business failure.
We continue with negotiations across the portfolio, with a view to leasing up
vacant accommodation and enhancing the average unexpired lease term.
Financing
Sterling and Euro Bank borrowings at 31 December 2009 were GBP104.6m and EUR140.2m
respectively. GBP14.3 million of sterling borrowings were repaid following the
sale of Finsgate House. The loan to value ratio under the Group's banking
agreement was 93.5% at 31 December 2009. The Company remains compliant with its
interest cover covenant, which stood at 156.2% against a minimum of 145%.
The Company's discussions with its lending bank regarding its future financing
arrangements are ongoing, together with further consideration of alternative
ways to maximise value for shareholders.
All enquiries:
Angus Pottinger
Invesco Asset Management Limited
020 7065 3714
Rory Morrison
Invesco Real Estate
020 7543 3500
23 February 2010
END
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