4th Aug 2008 07:00
Wichford P.L.C.
("Wichford" and "the Company")
Interim Management Statement
4th August 2008
"Since the Interim Statement for the six month period to 31st March 2008, Wichford has made further progress in its key objectives.
As announced on 22nd July 2008, an agreement has been concluded with Trillium Prime Properties (the "Trillium Agreement"), acting on behalf of several UK Central Government departments, to extend their leases on 16 properties to 2023, with a break in 2018, and to link the rents to the UK Consumer Price Index ("CPI"). The Company has also completed on the acquisition of a new building in The Hague let to the Dutch State for occupation by the International Criminal Court. Further details are set out below.
Following these purchases, over 58% of the Company's leases are now linked to an inflation index and the weighted average unexpired lease term has been increased to 12.5 years. The strong covenant of Wichford's tenants and the low vacancy rates means that the Company's income is secure and increasingly predictable.
Trillium Agreement
Wichford has completed the renewal of the leases on 16 properties with Trillium Prime Properties (GP) Ltd. The leases on 15 properties will now be linked to UK CPI with start dates ranging from 2002 to 2012. Under the Trillium Agreement, consideration of £3,185,000 will be payable by Wichford in the form of rent free periods on the properties, which will be amortised over the life of the leases. Wichford has also agreed to alterations to the terms of the leases to allow for subߛletting and alienation.
|
Property |
Review Basis |
Rent payable on completion |
CPI Start Date |
Next rent review date |
Previous Expiry |
New Break date |
New Expiry Date |
|
Grays |
CPI |
£145,480 |
2007 |
2010 |
2020 |
2018 |
2023 |
|
Sparkhill |
CPI |
£156,250 |
2010 |
2015 |
2020 |
2018 |
2023 |
|
Smethwick |
CPI |
£159,375 |
2012 |
2017 |
2022 |
2018 |
2023 |
|
Paisley |
CPI |
£195,000 |
2007 |
2010 |
2020 |
2018 |
2023 |
|
Southampton |
CPI |
£456,125 |
2007 |
2009 |
2014 |
2018 |
2023 |
|
Basildon |
CPI |
£527,500 |
2007 |
2011 |
2013 |
2018 |
2023 |
|
Sheffield |
CPI |
£725,000 |
2007 |
2011 |
2016 |
2018 |
2023 |
|
Watford |
CPI |
£854,000 |
2009 |
2014 |
2009 |
2018 |
2023 |
|
Oldham |
CPI |
£205,000 |
2007 |
2010 |
2015 |
2018 |
2023 |
|
Peterborough |
OMV |
£700,000 |
n/a |
2010 |
2015 |
2018 |
2023 |
|
Birkenhead |
CPI |
£705,000 |
2003 |
2008 |
2018 |
2018 |
2023 |
|
Plymouth |
CPI |
£854,770 |
2007 |
2011 |
2021 |
2018 |
2023 |
|
Chippenham |
CPI |
£187,035 |
2007 |
2009 |
2019 |
2018 |
2023 |
|
Dalkeith |
CPI |
£110,000 |
2007 |
2010 |
2020 |
2018 |
2023 |
|
Manchester |
CPI |
£140,000 |
2007 |
2009 |
2019 |
2018 |
2023 |
|
Barnsley |
CPI |
£237,131 |
2002 |
2007 |
2017 |
2018 |
2023 |
The Hague Wichford completed the acquisition of Haagse Veste1 in The Hague, Netherlands for a consideration of €34,978,050. The building is occupied by the Dutch Government for use by the International Criminal Court. The property provides a total net lettable space of approximately 12,350 square metres plus 155 car parking spaces. It is let for a term of 6 years from July 2008 with the tenants' option to extend for a further 4 years. The initial rent is €2,081,194 and is indexed to 100% of the Dutch CPI on a yearly basis.
Finance
There are no Loan to Value covenants on the Company's major debt from Lehman Brothers, and it has favourable interest rate swaps in place to hedge against short term interest rate volatility.
However, loans inherited on an acquisition in Germany and which have comparatively low historical interest rates will require to be refinanced from 2010 onwards. Whilst the Company has adequate facilities from Lloyds TSB to effect these re-financings, they are likely to be at higher interest rates than those currently being incurred. This will lead to an increased interest expense from 2010.
Outlook
The short term outlook for financial and property markets remains volatile and unpredictable, although there is evidence that countries in which Wichford owns properties in Continental Europe are better placed to withstand the economic downturn.
Higher inflation rates are expected to benefit the Company's rental income growth, although this benefit may be offset if borrowings referred to above are renewed at increased cost.
However, the Board believes that there are an increasing number of attractive investment opportunities arising in the UK, particularly properties which would be appropriate for the Company's Active portfolio."
On behalf of the Board of Wichford P.L.C.
Philippe de Nicolay
Chairman
For further details, please contact,
|
Wichford P.L.C. |
|
|
Philippe de Nicolay |
00 33 1 40 74 42 79 |
|
Wichford Property Management Ltd |
|
|
Jamie Hambro |
020 7747 5678 |
|
Philip Cooper |
020 7495 7111 |
|
Michael Watters |
020 7811 0100 |
|
Citigate Dewe Rogerson |
020 7638 9571 |
|
George Cazenove |
|
|
Hannah Seward |
Notes to Editors
Wichford P.L.C. (UK Listed: WICH) is a property investment company, with a portfolio focused on investment property occupied exclusively by Central and State Government bodies. Approximately a quarter of the portfolio comprises public sector rented properties in Germany and France.
Related Shares:
RDI.L