TIDMPACL
RNS Number : 7044A
Pacific Alliance China Land Limited
03 April 2012
3 April 2012
Pacific Alliance China Land Limited
Full year results for the period ended 31 December 2011
Pacific Alliance China Land Limited ('PACL' or the 'Company'),
an AIM-traded, closed-end investment company with a portfolio of
investments including existing properties, new developments,
distressed projects and real estate companies in Greater China, has
today announced its full year financial results to 31 December
2011.
Financial Highlights
-- Net asset value as at 31 December 2011 was US$295 million,
representing US$2.11 per share, a 21% increase from 31 December
2010 (US$242 million, representing US$1.75 per share).
-- The Company's share price closed at US$1.28 on 31 December
2011. This represented a 2.6% increase year on year, and a 39%
discount to the audited NAV per share. PACL's NAV and share price
have continued to consistently outperform major benchmark indices
including the FTSE 350 Real Estate Index and the FTSE AIM All-Share
index.
-- Since inception, the Company's net asset value per share has
grown from US$1.00 to US$2.11 (as at 31 December 2011), equivalent
to a rate of 20 per cent gross of distributions compounded
annually, despite a market downturn in 2008.
Portfolio and Fund Developments
-- During the first quarter of 2011, PACL sold its remaining
indirect interest in HNA Airport for a total of US$14.5 million
which, together with previous partial realisations, brings total
consideration of HNA Airport to US$27.4 million in cash of which
US$13.6 million is attributable to PACL. This represents a 1.3x
cash multiple.
-- In June 2011, the Company exercised its put option to sell
its 40 per cent interest in Project Blue Bird to its JV partner,
Vanke, for a total of RMB125 million, of which RMB62 million is
attributable to PACL. This represents a net IRR of 16% and a cash
multiple of 1.3x.
-- In July 2011, the Company sold its 30% equity interest in the
main strategic asset of SZITIC Commercial Property Development Co.,
Ltd ("Project Malls"), receiving net cash proceeds of RMB377
million (equivalent to US$58.6 million after tax and direct cost),
which represents a 4.7x cash multiple on the initial investment.
The Company continues to hold Project Mall's two remaining non-core
strategic assets through a 30% interest in a new holding company
called SZITIC Management Co. Ltd. These two assets are a minority
stake in Walmart China's retail JV business and a minority stake in
a large parcel of land near to Shanghai's future Disneyland.
Patrick Boot, Managing Director, Pacific Alliance Real Estate
Limited, indicated that while the Company maintains a cautious
outlook for the residential property sector in 2012, it continues
to see more stability in the country's commercial property
sector.
"Over the last 12 months, we have seen China's residential
property sector constrained by tight monetary policy aimed at
curbing inflation, and we do not expect any significant easing in
the near term. However, over the same period we have seen strong
growth in both rentals and occupancies in Grade A commercial office
and retail properties, particularly in tier one cities. While the
current negative global outlook may slow the upward trend of office
rental growth in 2012, we expect a continued positive trend in the
retail sector."
The Company also believes tight credit conditions should present
new and attractive acquisition opportunities as developers search
for alternative forms of financing, and the Company will continue
to focus on these opportunities to deliver solid returns to
shareholders.
A full copy of the Annual Report will be distributed to all
registered shareholders and will be available on the Company's
website: www.pacl-fund.com
For further information, please contact:
MANAGER: LEGAL COUNSEL:
Patrick Boot, Managing Partner Jon Lewis, General Counsel
Pacific Alliance Real Estate Limited PAG
15/F, AIA Central T: (852) 2918 0088
1 Connaught Road F: (852) 2918 0881
Central, Hong Kong jlewis@pagasia.com
T: (852) 2918 0088
F: (852) 2918 0881
pboot@pagasia.com
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BROKER: NOMINATED ADVISER:
Hiroshi Funaki Philip Secrett
LCF Edmond de Rothschild Securities Grant Thornton Corporate Finance
T: (44) 20 7845 5960 T: (44) 20 7383 5100
F: (44) 20 7845 5961 Philip.J.Secrett@uk.gt.com
funds@lcfr.co.uk
---------------------------------------- ----------------------------------
MEDIA RELATIONS:
Stephanie Barry / Anna Chan
PAG
T: (852) 3719 3375 / (852) 3719
3342
sbarry@pagasia.com / annac@pagasia.com
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About Pacific Alliance China Land Limited
Pacific Alliance China Land Limited ("PACL") (AIM: PACL) is a
closed-end investment company that was admitted to trading on the
AIM Market of the London Stock Exchange in November 2007. PACL is
focused on investing in a portfolio of existing properties, new
developments, distressed projects and real estate companies in
Greater China. PACL is managed by PAG (formerly known as Pacific
Alliance Group).
For more information about PACL, please visit:
www.pacl-fund.com
PAG is one of the region's largest Asia-focussed alternative
investment managers, with funds under management across Private
Equity, Real Estate and Absolute Returns strategies. Founded in
2002, PAG now has a presence across Asia with over 270 staff
working in the region.
For more information about PAG, please visit:
www.pagasia.com
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
Chairperson's Statement
Pacific Alliance China Land Limited ("the Company" or "PACL")
performed strongly once again in 2011. The Company's net asset
value ("NAV") as of 31 December 2011 was US$295 million or
US$2.1073 per share, a 21% increase from 2010. This increase is
largely attributable to the Company's continued commitment to a
combination of defensive and growth strategies which has delivered
significant value to shareholders.
Two strategic investments made by the Company in 2009 - Project
Diplomat and Project Malls - continued to outperform in 2011 and
drove much of PACL's growth over the period. Project Diplomat,
widely recognised as one of the most prestigious serviced apartment
buildings in Beijing, saw a substantial increase in net operating
income as well as property value during the year as a result of
lower vacancy rates and higher rental rates, while the Shanghai
Villa Land of Project Malls appreciated significantly due largely
to the commencement of construction of Shanghai Disneyland.
In 2011, the Company successfully exited two projects: Project
Hainan Airport and Project Blue Bird; and partially exited Project
Malls with the sale of its 30% equity interest in the shopping mall
platform at a price substantially above its existing NAV at the
time. The Company will continue to focus its efforts on actively
managing its portfolio with the goal of realizing investments at or
above NAV.
The investment manager maintains a cautious outlook for the
China property sector in 2012. As reported by the Company in 2011,
the Chinese government continues to favour policy measures to curb
residential property prices and prevent overheating of the economy,
which are starting to have the desired effect with residential
property prices falling consistently over the last four months of
2011 along with declining transaction volumes in major cities
nationwide.
In contrast, China's office and retail property sectors
generally showed strong growth in 2011 which has positively
contributed to the Company's growth story. Our strategic focus on
the commercial, retail and leisure property sectors has insulated
the Company from much of the volatility in the residential sector,
while at the same time, allowing the Company to capitalize on
growth in the office/retail property market driven by rising wages
and increased consumption.
The Board of Directors would like to take this opportunity to
thank you for your commitment and support in 2011. We are confident
that our opportunistic multi-strategy investment approach will
continue to deliver attractive risk-adjusted returns to
shareholders despite volatile global financial markets and a
generally lower expectation of economic growth worldwide.
Margaret Brooke
Chairperson
Investment Manager's Report
Portfolio Performance
As at 31 December 2011, the Company's audited total net asset
value ("NAV") was US$295 million, or US$2.1073 per share. This is a
21% increase from 2010 and an annualized increase of 20% since
inception. Independent valuations are currently undertaken on a
quarterly basis by recognized international valuation firms and
real estate appraisers.
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