4th Nov 2008 07:00
FOR IMMEDIATE RELEASE
4 NOVEMBER 2008
TAP - interim management statement
the Advantage Property Income Trust Limited (the "company" or "tap")
AUTUMN 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 Net Asset Value (NAV). TAP has maintained its better capital returns at property level against the IPD (monthly) universe (-5.6% v -6.2%) over Q3.
The property portfolio continues to be managed with the aim of providing higher than average income returns. 62% of TAP's income is secured for more than 5 years and covenant checks show that occupier risk within the portfolio is in line with the market. TAP has a lettable void rate of 4.87% as at 30th September 2008 which compares very favourably with IPD at 8.10% for the same period. The Company remains focused on a number of asset management initiatives to drive income growth including the ongoing refurbishment programmes underway at Reading and Stratford upon Avon, which have resulted in a total void of 7.66%.
The Company continues to follow its strategy of reducing debt. A further sale was made this quarter with the disposal of an industrial estate in Stroud. The Company continues to review the future potential of all stabilised assets.
Financial Highlights as at 30 September 2008
NAV fallen to 76.4p, a reduction of 12.8% over the quarter
Share price 43.00p (30/09/08)
Discount to NAV 43.7% (30/09/08)
Portfolio nominal equivalent yield of 7.45% (6.97% Q2 08)
Portfolio total return for the quarter was -4.1% (IPD Monthly Index Q3 at -4.8%)
One sale completed in Q3
Dividend 3.125 pence per share per annum
Estimated dividend cover 128% on recurring cash basis
Portfolio Activity
Two new lettings completed during the quarter providing an additional £220,960 pa of rental income to the Company including the letting of 47,000sq ft in Northampton to Dalepak Ltd.
The Garrard Waters unit at Brackmills was destroyed by fire and an insurance claim is now being progressed. Detailed discussions with the occupier in respect of the future are currently in progress.
An industrial estate in Stroud sold for £1,215,000, achieving a 3.4% premium above the preceding valuation and reflecting a 6.5% NIY to the purchaser.
Six rent reviews and one lease renewal completed over the quarter, providing the Company with £63,250 pa of additional rental income. Two rent reviews completed in Sutton in Ashfield securing uplifts of 25% and 21% respectively.
The refurbishment and repositioning of AdVantage Reading, Brunswick Point in Leeds and The Swan Centre, Stratford upon Avon are underway.
The Company has agreed a £2.2m debt repayment in Q3 as a result of receipts from previously completed sales.
Key Financial Statistics
As at 30 SEPTEMBER 2008
|
Fund |
|
|
Launched |
Feb 2005 |
|
Share Price (30/09/08) |
43.00p |
|
Total shares issued |
142,747,300 |
|
Long term debt |
£117,754,332 |
|
Gearing |
53.4% LTV |
|
Average all in cost of debt |
Est. 5.82% |
|
Dividend dates |
Feb, May, Aug, Nov |
|
Property Portfolio |
|
|
Total property assets |
£220,328,000 |
|
Number of properties |
73 |
|
Average lot size |
£ 3.02 million |
|
Average lease length |
6. 51 years |
|
Total void rate (% rental value) |
7.66% |
|
Lettable void rate |
4.87% |
|
Income return (annualised) |
6.71% |
|
Net Initial Yield |
6.87% |
|
Net Reversionary Yield |
8.10% |
PROPERTY PORTFOLIO
Property Market
The market total return performance for Q3 2008 is -4.8%, a significant decline since the -2.7% recorded in Q2 2008 (IPD Monthly quarterly result). This brings the total return for the preceding 12 months to -18.1%. Capital falls have gained momentum over the quarter with -5.6% against-4.0% in Q2 2008 as a product of continuing outward yield shift. CB Richard Ellis calculates that the all property prime equivalent yield has moved out 40bps over the quarter to 6.5%, its highest level since Q1 2004.
The substantially reduced number of market transactions has continued in Q3 2008 with total investment in the quarter of circa £5bn, similar to Q2 2008, and a third of the total invested in UK property in the same quarter in 2007.
Rental growth in Q3 2008 was marginally negative. This was due mainly to falls in central London office rents, high street shops, retail warehouses and regional offices. According to CBRE, all property rental growth for the year to date is flat at 0% whilst annual rental growth now stands at 0.9% - the lowest year-on-year rate since summer 2004.
kEY pORTOLIO aCTIVITIES
Top 10 property investments
|
|
Location |
Valuation Weighting |
|
The Brunel Centre |
Bletchley |
5.34% |
|
Waterfront Business Park |
Fleet |
4.81% |
|
National Westminster House |
Guernsey |
4.81% |
|
Brunswick Point |
Leeds |
4.72% |
|
The Links |
Warrington |
4.15% |
|
Kingscourt Leisure Complex |
Dundee |
4.03% |
|
Silver Court |
Welwyn Garden City |
3.52% |
|
Southgate Retail Park |
Derby |
3.49% |
|
Geoffrey House |
Maidenhead |
3.31% |
|
Pagoda Park |
Swindon |
2.31% |
|
Total |
|
40.49% |
Top 10 tenants
|
Income Weighting |
|
|
Halfords Limited |
14.3% |
|
Clydesdale Bank plc |
5.7% |
|
Nisaba Group Ltd |
4.5% |
|
National Westminster Bank plc |
4.1% |
|
Toys R Us |
3.7% |
|
Odeon Multiplex Ltd |
3.3% |
|
Amtek Investments UK 2 Ltd |
3.2% |
|
Exel Europe Ltd |
2.4% |
|
GeoPost Ltd |
1.9% |
|
Securicor ADI Group Ltd |
1.7% |
Sector breakdown %
|
36.82 |
Offices |
|
21.30 |
Industrial |
|
19.89 |
Retail Warehousing |
|
17.96 |
Retail |
|
4.03 |
Leisure |
Geographic breakdown %
|
36.36 |
South East |
|
11.56 |
Scotland |
|
10.17 |
East Midlands |
|
9.44 |
West Midlands |
|
7.49 |
Yorkshire & Humberside |
|
6.98 |
North West |
|
4.81 |
Channel Islands |
|
4.54 |
South West |
|
4.33 |
Outer London |
|
2.53 |
Eastern |
|
1.36 |
Wales |
|
0.43 |
North East |
Contact details
For further information, or to organise a presentation, please contact:
Broker
Singer Capital Markets LtdOne Hanover StreetLondonW1S 1AX
Graham Swindells / Brad cheng - 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 / FRASER KENNEDY - T: 020 7659 6666
Source: This snap shot has been approved for issue by The 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 30 September 2008. Past performance cannot be relied upon as a guide to future performance.
The 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