7th Aug 2008 16:34
FOR IMMEDIATE RELEASE
AUGUST 2008
TAP - SNAPSHOT REPORT
the Advantage Property Income Trust Limited
sUMMER 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 continued to provide better capital returns at property level against the IPD universe (-2.8% v -4.0%) over Q2.
The property portfolio continues to be managed with the aim of providing higher than average income returns. 66% 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 5.81% as at 30th June 2008 which compares very favourably with IPD at 8.00% for the same period. Notwithstanding this, decisions to determine leases at Reading and Northampton, in order to implement asset management initiatives has resulted in an increased total void rate of 9.25%.
Two sales were completed over Q2 and the Company is continuing to review potential sales of stabilised and non income producing assets.
Financial Highlights
NAV fallen to 87.6p, a reduction of 4.3% over the quarter
Share price 43.00p (30/06/08)
Discount to NAV 49.1% (30/06/08)
Portfolio nominal equivalent yield of 6.97% (6.84% Q1 08)
Portfolio total return for the quarter was -1.4% (IPD Quarterly Index at -2.7%)
2 sales completed in Q2
Dividend 6.5 pence per share
Estimated dividend cover 65% on recurring cash basis
Portfolio Activity
Four rent reviews have completed over the quarter providing the Company with £26,655 pa of additional income. Reviews completed in Welwyn Garden City and Ayr securing uplifts of 16.9% and 8.8% respectively.
Unit 2, Euroway Office Park, Bradford sold for £260,000, reflecting a premium of 5.8% above the preceding valuation.
Retail shop at 6/7 Cornhill Lincoln sold for £950,000.
A total of three lettings completed over the quarter providing an additional £21,000 pa of rental income including a new 10 year lease to The Battery Shop at The Orbit Centre, Swindon.
The refurbishment and repositioning of AdVantage Reading (formally Associates House) has commenced. This project will take advantage of the current limited supply in central Reading and is due to complete in December 2008.
The lease renewal to Britannia Building Society at Torquay has completed for a new 10 year term at £58,750 pa, a 38% uplift on the previous rent passing.
Key Financial Statistics
As at 30 June 2008
|
Fund |
|
|
Launched |
Feb 2005 |
|
Share Price (30/06/08) |
43.00p |
|
Total shares issued |
142,747,300 |
|
Long term debt |
£117,754,333 |
|
Gearing |
50.8% LTV |
|
Average all in cost of debt |
Est. 5.81% |
|
Dividend dates |
Feb, May, Aug, Nov |
|
Property Portfolio |
|
|
Total property assets |
£233,580,000 |
|
Number of properties |
74 |
|
Average lot size |
£ 3.16 million |
|
Average lease length |
6. 84 years |
|
Total void rate (% rental value) |
9.25% |
|
Lettable void rate |
5.81% |
|
Income return (annualised) |
6.14% |
|
Net Initial Yield |
6.41% |
|
Net Reversionary Yield |
7.66% |
PROPERTY PORTFOLIO
Property Market
The market total return performance for Q2 2008 is -2.7% (IPD quarterly result), the fourth consecutive quarter of negative total returns in the UK. Capital growth has been negative this quarter with -4.0% (-4.7% Q1 2008). This continues to be driven by outward yield shift across all sectors. In Q2 the all property equivalent yield has moved out by 30 bps, and yields are now as per the middle of 2004. The substantially reduced number of market transactions continued in Q2 2008. According to CBRE just under £5bn of transactions were completed during the quarter compared to more than £17bn in the same period last year.
Rental Growth has all but disappeared in Q2. CBRE indicate that all property rental growth for Q2 was 0.1%. As last quarter, offices were the worst performing sector, however, the figures do include Central London offices and once again this sector and especially the City of London have fared particularly badly seeing significant increases in incentives and reductions in headline rents.
kEY pORTOLIO aCTIVITIES
Top 10 property investments
|
|
Location |
Valuation Weighting |
|
The Brunel Centre |
Bletchley |
5.29% |
|
Waterfront Business Park |
Fleet |
4.75% |
|
Brunswick Point |
Leeds |
4.62% |
|
National Westminster House |
Guernsey |
4.37% |
|
The Links |
Warrington |
4.02% |
|
Kingscourt Leisure Complex |
Dundee |
3.98% |
|
Southgate Retail Park |
Derby |
3.71% |
|
Silver Court |
Welwyn Garden City |
3.42% |
|
Geoffrey House |
Maidenhead |
3.30% |
|
Pagoda Park |
Swindon |
2.25% |
|
Total |
|
39.71% |
Top 10 tenants
|
Income Weighting |
|
|
Halfords Limited |
14.3% |
|
Clydesdale Bank plc |
5.7% |
|
Nisaba Group Ltd |
4.6% |
|
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 %
|
35.8 |
Offices |
|
21.6 |
Industrial |
|
20.9 |
Retail Warehousing |
|
17.7 |
Retail |
|
4.00 |
Leisure |
Geographic breakdown %
|
36.3 |
South East |
|
11.4 |
Scotland |
|
10.3 |
East Midlands |
|
9.7 |
West Midlands |
|
7.4 |
Yorkshire & Humberside |
|
6.8 |
North West |
|
5.0 |
South West |
|
4.4 |
Channel Islands |
|
4.3 |
Outer London |
|
2.6 |
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 LimitedAnson 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 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 June 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
Related Shares:
TAP.L