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Company F&C Commercial Property Trust Ld
TIDM FCPT
Headline

Interim Management Statement

Released 11:00 17-May-2013
Number 9997E11

RNS Number : 9997E
F&C Commercial Property Trust Ld
17 May 2013
 



F&C Commercial Property Trust Limited

 

Interim Management Statement

 

For the Period from 1 January 2013 to 17 May 2013

 

 

 

Investment Objective

 

The investment objective of the Company is to provide ordinary shareholders with an attractive level of income together with the potential for capital and income growth from investing in a diversified UK commercial property portfolio.

 

Performance Summary

 

 

 

 

Total Return

For the three month period ended

31 March 2013



Net asset value per share *

1.5%

Ordinary Share price

1.4%

Investment Property Databank Quarterly Universe

1.2%

FTSE All-Share Index

10.3%



 

 

 

Capital Values

As at

 31 March

2013

As at

31 December 2012

 

 

% Change





Net asset value per share *

98.8p

98.8p

-

Ordinary Share price

103.6p

103.7p

-0.1

Premium to net asset value *

4.9%

5.0%


Gearing * #

27.4%

27.8%


Net gearing * $

13.9%

15.0%






 

Sources: F&C Investment Business Limited, Investment Property Databank ('IPD'), Datastream.

 

*  Calculated under International Financial Reporting Standards ('IFRS'). Net asset value total return is calculated assuming dividends are re-invested

 

#  Gearing: Borrowings/total assets (less current liabilities)

 

$  Net gearing: (Borrowings - cash)/total assets (less current liabilities and cash)

 

 

Review of the First Quarter

 

Property Market Overview

 

Total market returns in the first quarter of 2013 were 1.2 per cent, according to the IPD Quarterly Universe, registering an improvement on the previous quarter. However, capital values moved lower in the three month period and rental growth was modest and patchy.

 

London is still out-performing the regions with Central London shops and offices being particularly strong. However, the quarter saw the regions experience the greater improvement in quarterly performance, although total returns remain subdued in absolute terms. Over the period total returns turned positive for Rest of South East offices (South East offices outside London) but stayed negative for Rest of UK offices for the sixth consecutive quarter. The quarter saw offices deliver the strongest performance among the three main commercial property sectors, followed by industrials, with retail lagging.

 

Investors are focused on long-term security of income which has benefited prime property in established locations. The preservation of the income stream has become critical against a muted economic backdrop and there is a marked gap in net income growth between prime and more secondary stock.

 

Investment activity is holding up well, with institutions becoming net investors during the quarter. It is a lack of prime stock rather than a lack of investor appetite which is restricting growth in the volume of transactions. Overseas investors are still driving the market but are widening their search beyond their core focus of Central London.

 

Property investors have remained cautious given the weak tone of the domestic economy and continued uncertainty in the Eurozone but sentiment has steadied and there is competition for property which meets their investment criteria.

 

Portfolio Overview

 

As at 31 March 2013 the Company's portfolio was valued at £888.5 million (31 December 2012: £879.7 million). After allowing for capital expenditure, this represented a 0.6 per cent increase in the valuation over the quarter.

 

The portfolio recorded a total return of 2.0 per cent over the period, compared with the IPD  Quarterly Universe total return of 1.2 per cent and the portfolio was ranked on the 12th percentile against 234 benchmark funds.

 

The strongest performing property sub-sectors of the portfolio were South East Retail, driven by the Company's largest asset St. Christopher's Place Estate, London W1, retail warehouses and South East offices. The weakest total return came from Rest of UK offices but these properties produced a positive total return and no sub-sector in the portfolio recorded a negative total return.

 

The Company incurred capital expenditure of £3.2 million, mainly relating to three of its main projects at Burma Road, Winchester; Thames Valley Two, Reading; and St. Christopher's Place Estate.

 

The student accommodation at Burma Road, Winchester is progressing well and three of the five blocks have already been handed over to the University of Winchester with the two remaining blocks due for completion in June 2013, in readiness for the new academic year. Long leased properties with strong credit and RPI linked or fixed rental uplifts continue to be highly sought after by investors resulting in this holding experiencing some further yield compression over the quarter. The refurbishment of Thames Valley Two, Reading has completed and we currently have two lettings at due diligence stage with good levels of demand for the remaining space. The project at St. Christopher's Place Estate relates to the refurbishment of an office floor and its part conversion to create four residential units. These works are progressing on budget and programme.

 

There were no sales or purchases over the period, although the sale of Charles House, 5-11 Regent Street, London SW1, at £36.0 million, completed on 5 April 2013 with contracts having been exchanged on 27 November 2012. The property was acquired by The Crown Estates, the freeholder, at a net initial yield of 5.96 per cent showing a profit of £1.6 million compared with the previous external valuation at 30 September 2012 of £34.4 million.

 

Void levels within the portfolio are 7.0 per cent of estimated rental value (excluding properties held for development) compared with the benchmark void rate of 10.2 per cent. This equates to approximately £3.5 million of rental value of which approximately 30 per cent is currently under offer. As previously reported, the Company has had an exposure to recent retailer defaults with units let to Comet and JJB Sports, with a combined rental liability of £1.3 million per annum. Negotiations to re-let both these units are now well advanced.

 

Dividends

 

Monthly interim dividends, in respect of the year ended 31 December 2012, each of 0.5 pence per share, were paid on 31 January, 28 February, 28 March and 26 April 2013. The Board has recently announced a first monthly interim dividend in respect of the year to 31 December 2013, of 0.5 pence per share, payable on 31 May 2013 to shareholders on the register on 17 May 2013.

 

Top Ten Holdings



Properties valued in excess of £100 million

Sector

London W1, St. Christopher's Place Estate

Retail

Properties valued between £70 million and £100 million


Newbury, Newbury Retail Park

Retail Warehouse

Properties valued between £50 million and £70 million


London SW1, Cassini House, St James's Street

Offices

London SW19, Wimbledon Broadway

Retail

Properties valued between £40 million and £50 million


Solihull, Sears Retail Park

Retail Warehouse

Properties valued between £30 million and £40 million


Rochdale, Dane Street

Retail Warehouse

London W1, 25 Great Pulteney Street

Offices

Uxbridge, 3 The Square, Stockley Park

Offices

London SW1, Charles House, 5-11 Regent Street*

Offices

Properties valued between £20 million and £30 million


Chorley, Units 6 and 8 Revolution Park

Industrial

 

* The sale of London SW1, Charles House, 5-11 Regent Street completed on 5 April 2013 with contracts having been exchanged on 27 November 2012.



 

Geographical Analysis

 

 

 

Location

31/03/2013

Percentage of portfolio


31/12/2012

Percentage of portfolio





London - West End

39.3


38.9

South East

27.8


27.7

Midlands

11.4


11.5

North West

11.1


11.2

Scotland

7.4


7.6

Eastern

1.9


2.0

Rest of London

1.1


1.1





Total

100.0


100.0

 

Sector Analysis

 

 

 

Sector

31/03/2013

Percentage of portfolio


31/12/2012

Percentage of portfolio





Offices

36.0


36.3

Retail

27.3


26.9

Retail Warehouses

20.3


20.5

Industrial

14.2


14.4

Other

2.2


1.9





Total

100.0


100.0

 

Issue of Shares

 

During the quarter to 31 March 2013 the Company issued 14.0 million Ordinary Shares, raising gross proceeds of £14.1 million. The Company has not issued any Ordinary Shares since the end of the quarter.

 

Subsequent Events

 

Other than the completion of the sale of Charles House referred to above, the Board is not aware of any significant events or transactions which have occurred since 31 March 2013 and the date of publication of this statement which would have a material impact on the financial position of the Company.

 

Quarterly and Key Information

 

This statement and further information regarding the Company, including movements in the share price since the end of the period and the Group's most recent annual and interim reports, can be found at the Company's website www.fccpt.co.uk.

 

Enquiries:

 

Richard Kirby

F&C REIT Asset Management LLP

Tel: 0207 499 2244

 

Graeme Caton

Winterflood Securities Limited

Tel: 0203 100 0268

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Interim Management Statement - RNS