31st Aug 2005 10:31
Insight Foundation Property Tst Ltd31 August 2005 Quarterly Factsheet - Number Five, August 2005 Insight Foundation Property Trust Limited NAV 106.4 pence (30 June 2005)*Total Shares Issued 260,000,000**Mid share price 114 pence (30 June 2005)Gross property Value £384.48 million (30 June 2005)Number of properties 72 (30 June 2005)Average lot size £5.34 millionAverage lease length 8.2 yearsEx dividend dates 28 October 2005 25 January 2006Next financial year end 31 March 2006Current Debt £152.5 millionArranger NM RothschildGearing 39.6% loan to valueCurrency GBPRegistered Office Guernsey * Prior to the dividend payment.**Prior to new equity issue. Investment objectiveTo provide investors with an attractive level of income together with potentialfor income and capital growth from investing in UK commercial property. IFPT performance overviewThe Net Asset Value ('NAV') of the Company increased to 106.4 pence per share,reflecting an uplift of 1.09 pence per share, or 1.04% over the previousquarter. In accordance with new accounting standards, the NAV of 106.4 pence pershare includes for the first time the possible negative impact of approximately2 pence per share for marking the cost of fixing the loan to current interestrates ('mark to market'). The 11.5 months to the end of June have seen the underlying NAV increase by 9.1%from 97.5 pence per share at launch. The June 2005 quarterly property portfoliovaluation was £384.48 million, reflecting a 2.83% capital uplift over the Marchvaluation. The Company paid a fourth dividend on the 12 August increasing thetotal dividends paid to 6.75 pence per share. As at 11 August the Company'sshare price was 116 pence per share, reflecting a premium to NAV of 10.9%. C Share IssueThe Company has raised £100 million of additional equity through the issue of anew class of C Shares. The issue was substantially over-subscribed and closed onthe 15 July. The issue enables the Company to retain core assets but alsotactically shift its bias towards London and South East offices with newacquisitions. Following the successful investment in new properties, the new CShares have been converted into Ordinary Shares. The conversion rate was set at0.9356 Ordinary Shares for each C Share. This increases the total number ofshares to 353,560,000. The Company's ranking in the FTSE Small Cap Index is now317, potentially resulting in future entry into the FTSE 350 in September. Portfolio ActivityThere has been considerable transactional and asset management activity sincethe last Factsheet. In particular London office properties totalling over £52million have been acquired and two properties totalling £13.9 million have beensold for material premiums to purchase price. Property market performanceThe second quarter of 2005 witnessed acceleration in the performance of thecommercial property market with lower interest rates underpinning a furtherstrengthening. The IPD Monthly Index reported annualised total returns in thethree months to June of 19.2%; relative to 11.1% for the period to March. Rentalgrowth is modest but now evident across all the sectors with the retail sectorremaining the strongest. However, we now anticipate future rental growth beingstrongest in the London and South East office sectors. Portfolio structureThe portfolio structure incorporates valuation data as at June 2005, but alsoincludes the new acquisitions of Minerva House and Mid City Place, and excludesrecent disposals. Central London 16%South Eastern 39%Rest of South 10%Midlands and Wales 22%North and Scotland 13% The Company maintains a balanced and diversified profile with 73 (as at 26August 2005) assets spread across the UK in the retail, office and industrialsectors. Recent acquisitions have tactically increased the London officeweighting. Retail 27%Retail Warehouse 2%Office 44%Industrial 27% Asset management highlights AcquisitionsThe Company completed the acquisition of Minerva House, London SE1 in July.Located on the south bank close to London Bridge Station, the high qualityoffice property comprises 91,000 sq ft and is let to ANZ Bank and Reed Smith(solicitors). It offers excellent potential for rental growth off low rents of£30 per sq ft. The purchase price of £42.13 million reflects an attractive netinitial income yield of 6.3%. The Company has also invested £10 million toaquire a 19.5% stake in a multi-let Mid Town office building, Mid City Place,London WC1. Mid City Place comprises 350,000 sq ft of prime office accommodationlet to 11 tenants on 15 leases. Tenants include Towers Perrin, EDF Trading,Halifax plc and Mitsubishi Corporation. DisposalsFollowing an earlier than anticipated completion of the asset business plan, theCompany has sold its industrial property in Corby. A pro-active letting policyenabled an opportunistic sale whilst fully let at £9.29 million, reflecting apremium of over £1 million relative to the July2004 acquisition price. The Company also sold its retail property on ForegateStreet, Chester for £4.59 million, a premium of 10% over the acquisition price. Active ManagementAt St Ann's Road, Harrow, a lease re-structuring with the Chelsea BuildingSociety has been completed the term from 5 years to 20 years, increasing therent by 7% over the previous estimate. At Kingston-upon-Thames, a new lease toEdinburgh Woollen Mill has extended thatextends the lease length from 11 years to 15 years at a rent that is 11% overthe previous level. Both of these initiatives are significantly value enhancing. At the Company's multi-let industrial estate in Bristol, a re-branding andtargeted marketing campaign has resulted in agreeing two new lettings at recordrents for the location reflecting a 20% premium to the valuation assumption. Largest Ten Holdings Value %Minerva House, 5&6 Montague Close, London £42,130,000 9.86%Victory House, Trafalgar Place, Brighton £17,350,000 4.06%Reynard Business Park, Brentford £17,300,000 4.05%20/22, Tudor Street, London, EC4 £16,800,000 3.93%The Albion Centre, Bath Street, Ilkeston £14,200,000 3.32%Olympic Office Centre, 8 Fulton Road, Wembley £12,950,000 3.03%Union Park, Fifers Lane, Norwich £12,715,000 2.98%The Gate Centre, Syon Gate Way, Brentford £10,400,000 2.43%Recticel Unit, Bluebell Close, Alfreton £10,150,000 2.38%Mid City Place, London £9,730,000 2.28%Total gross value £163,725,000 38.32% Largest Ten Tenants Rent %ANZ Banking Group Ltd £1,460,000 5.32%Mott MacDonald Ltd £1,307,148 4.76%Reed Smith Services £1,295,374 4.72%Freshfields Sevices Company £1,279,600 4.66%The British Broadcasting Corporation £826,000 3.01%Grand Metropolitan Estates Ltd £795,975 2.90%Recticel SA £713,538 2.60%Jarvis Porter (Property Holdings) Ltd £700,000 2.55%Concept Automotive Services Ltd £515,970 1.88%Tucker, Crossland Darke (Irwin Mitchell) £506,638 1.85%Total rent £9,400,243 34.25% Contacts BrokerJP Morgan Cazenove20 MoorgateLondonEC2R 6DATel: 020 7588 2828Richard Cotton(Managing Director, Corporate Finance)Angus Gordon Lennox(Managing Director, Corporate Finance) Fund AdministrationRBSI Fund Services (Guernsey) LimitedSt Andrews HouseLe BordageSt Peter PortGuernseyGY11BRTel: 01481 740 820Paul Smith(Managing Director, RBSI Guernsey) Investment ManagerInsight Investment Management (Global) Limited33 Old Broad StreetLondonEC2N 1HZTel: 020 7930 5474Duncan Owen(Managing Director, Property) Issued in accordance with Section 21 of the Financial Services and Markets Act2000 by Insight Investment Management (Global) Limited. The price of shares andthe income from them may go down as well as up and investors may not get backthe full amount invested on disposal of the shares. Investments in property arerelatively illiquid and more difficult to realise than equities or bonds. Yieldsmay vary, and are not guaranteed. The use of gearing is likely to lead to avolatility in the Net Asset Value (NAV), meaning that a relatively smallmovement either down or up in value of the trust's total assets, will result ina magnified movement in the same direction, of that NAV. There is no guaranteethat the market price of shares in Investment Trusts will fully reflect theirunderlying NAV. This Investment Trust should be considered only as part of abalanced portfolio, of which it should not form a disproportionate part. Underno circumstances should this newsletter be considered as an offer, orsolicitation, to deal in the shares of the company. All figures correct as at30th June 2005. Past performance is not a guide to the future. Insight Investment Management (Global) Limited. Registered office 33 Old BroadStreet, London EC2N 1HZ.Registered in England and Wales. Registered number 827982. Authorised andregulated by the Financial Services Authority.03166-08-05 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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