13th May 2008 06:00
FOR IMMEDIATE RELEASE
13 may 2008
TAP - INTERIM MANAGEMENT STATEMENT
Teesland Advantage Property Income Trust Limited (THE "company" or "tap")
spring 2008
Investment objectives -
To provide shareholders with an attractive level of income, together with the potential for income and capital growth derived from investment in the Group's diversified portfolio of commercial property in the United Kingdom and the Channel Islands.
TAP benefits from a well balanced and diversified portfolio, with the opportunity to increase income and capital value. The Fund provides an attractive dividend yield to investors, with further income growth through the delivery of asset management initiatives.
Property Fund Adviser's comments -
Investment Strategy
The quoted market continues to price stock at significant discounts to NAV. TAP has continued to provide better capital returns at property level against the IPD universe.
The property portfolio continues to be managed with the aim of providing higher than average income returns. 64% of income being secured for more than 5 years and our covenant checks showing lower than market risk for our occupiers. TAP has a lower than market void rate (5.3%v 9.28%).
The Company has continued a policy of using surpluses achieved through sales to reduce the level of floating rate debt, repaying £8m of debt in the quarter. In addition, the Company has continued to; consider share buy-backs, reduce costs and increase dividend cover.
Sales of stabilised assets have been and are being undertaken throughout the year to capture capital added value.
Financial Highlights
NAV fallen to 91.5p, a reduction of 6.3% over the quarter
Share price 56.75p (31/03/08)
Discount to NAV 38.0% (31/03/08)
Portfolio net initial yield of 6.39% (increase of 26bps on Q4 07)
Portfolio total return for the quarter was -2.1% (IPD Quarterly Index at -3.4%)
Sales in Q1 have been above valuation and produced £0.35m of surpluses
Dividend 6.5 pence per share
Estimated dividend cover 65%
Portfolio Activity
15/17 Beastfair, Pontefract has been sold for £1,475,000 which reflects a premium of 1.7% above the preceding valuation.
Two flats forming the upper parts of 127 Union Street, Aberdeen have been sold for £270,000 reflecting a 35% uplift on valuation and a 79% increase on book cost.
Seven rent reviews have been completed over the quarter providing the Company with an additional £19,000 pa of income. Reviews completed at Kettering and Sutton in Ashfield secured rental uplifts against passing rents of 27% and 18% respectively.
A total of four lettings have been agreed over the quarter providing circa £86,500 pa of additional rental income.
A new reversionary lease has been completed at our Kettering property to Travis Perkins (Properties) Limited, providing an unexpired term of 15 years, no rent free was provided to the occupier. The outstanding rent review was also settled at £61,635, an 8% uplift on the passing rent.
A new 10 year lease has been completed to Hot Office at Silver Court, Welwyn Garden City.
The Company has accepted a surrender of Citi Financial's lease at Associates House, Reading. The property will be refurbished and repositioned to take advantage of the current limited supply in central Reading and is due to complete in December 2008.
Comprehensive refurbishments of the industrial units at Advantage One, Milton Keynes and Tweed Road Industrial Estate, Clevedon have completed and have received good interest from occupiers in respect of the refurbished accommodation.
Key Financial Statistics
As at 31 March 2008
|
Fund |
|
|
Launched |
Feb 2005 |
|
Share Price (31/03/08) |
56.75p |
|
Total shares issued |
142,747,300 |
|
Long term debt |
£117,754,332 |
|
Gearing |
48.7% LTV |
|
Average all in cost of debt |
Est. 5.98% |
|
Dividend dates |
Feb, May, Aug, Nov |
|
Property Portfolio |
|
|
Total property assets |
£241,840,000 |
|
Number of properties |
76 |
|
Average lot size |
£ 3.18 million |
|
Average lease length |
6. 71 years |
|
Void rate (% rental value) |
5.28% |
|
Income return (annualised) |
6.35% |
|
Net Initial Yield |
6.39% |
|
Net Reversionary Yield |
7.08% |
PROPERTY PORTFOLIO
Property Market -
The market total return performance for Q1 2008 is -3.3% (IPD quarterly result). Capital growth has been negative since July, however, the degree of change has slowed this quarter with -4.6% compared to -9.7% in Q4 2007. The substantially reduced number of market transactions continues, albeit valuers confirm sufficient transactions for evidence purposes rather than just sentiment driving change.
Rental Growth in the CBRE index showed the strongest sector as Retail Warehouses, followed by Retail and Industrial, however, the level of office rental growth has fallen away this quarter to -1.7%. Of considerable concern was the increase in the average void rate across all sectors from 8.87% to 9.28% (IPD). On the yield side Industrial yields moved out most during the quarter showing a 30 bps outward shift in the market.
kEY pORTOLIO aCTIVITIES -
Top 10 property investments
|
|
Location |
Valuation Weighting |
|
The Brunel Centre |
Bletchley |
5.32% |
|
Waterfront Business Park |
Fleet |
4.76% |
|
Brunswick Point |
Leeds |
4.59% |
|
National Westminster House |
Guernsey |
4.22% |
|
The Links |
Warrington |
3.95% |
|
Southgate Retail Park |
Derby |
3.73% |
|
Kingscourt Leisure Complex |
Dundee |
3.85% |
|
Geoffrey House |
Maidenhead |
3.58% |
|
Silver Court |
Welwyn Garden City |
3.42% |
|
Pagoda Park |
Swindon |
2.25% |
|
Total |
|
39.65% |
Top 10 tenants
|
Income Weighting |
|
|
Halfords Limited |
13.6% |
|
Clydesdale Bank plc |
5.5% |
|
Nisiba Group Ltd |
4.3% |
|
National Westminster Bank plc |
3.9% |
|
Toys R Us |
3.5% |
|
Odeon Multiplex Ltd |
3.1% |
|
Amtek Investments UK 2 Ltd |
3.0% |
|
Citi Financial Europe plc |
2.6% |
|
Exel Europe Ltd |
2.3% |
|
GeoPost Ltd |
1.8% |
Sector breakdown %
|
35.9 |
Offices |
|
21.5 |
Industrial |
|
20.8 |
Retail Warehousing |
|
18.0 |
Retail |
|
3.8 |
Leisure |
Geographic breakdown %
|
36.4 |
South East |
|
11.3 |
Scotland |
|
9.6 |
West Midlands |
|
10.3 |
East Midlands |
|
7.5 |
Yorkshire & Humberside |
|
6.7 |
North West |
|
4.9 |
South West |
|
4.3 |
Outer London |
|
4.2 |
Channel Islands |
|
3.0 |
Eastern |
|
1.4 |
Wales |
|
0.4 |
North East |
Contact details
For further information, or to organise a presentation, please contact:
Broker
Kaupthing Singer & Friedlander Capital Markets LtdOne Hanover StreetLondonW1S 1AX
Graham Swindells - T: 020 3205 7500
Secretary
Anson Fund Managers Limited
Anson Place
Mill Court
La Charroterie
St. Peter Port
Guernsey
GY1 1EJ
T: 01481 722260
Property Fund Adviser
Valad Asset Management (UK) Limited
1 Mount Street
London W1K 3NB
Chris Carter Keall - T: 020 7659 6666
Source: This interim management statement has been approved for issue by Teesland Advantage Property Income Trust Limited, which accepts responsibility for the information contained herein save for the content of the Property Fund Adviser's comments.
This document is not, and is not intended to be an invitation, inducement, offer, or solicitation, to deal in the shares of the company. The price of shares in the company and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of shares in the company. An investment in the company should be considered only as part of a balanced portfolio of which it should not form a disproportionate part. Investments in property are relatively illiquid and may be more difficult to realise than equities or bonds. Yields may vary and are not guaranteed. All figures are correct as at 31 March 2008. Past performance cannot be relied upon as a guide to future performance.
Teesland Advantage Property Income Trust Limited (TAP)
Anson Place, Mill Court, La Charroterie, St. Peter Port, Guernsey GY1 3GF
T 01481 722260 F 01481 729829 E [email protected] W www.tapincome.com
END OF ANNOUNCEMENT
E&OE - In transmission
Related Shares:
TAP.L