TIDMEPIC
RNS Number : 8608P
Ediston Property Inv Comp PLC
22 October 2021
Ediston Property Investment Company plc
(LEI: 213800JRL87EGX9TUI28)
Net Asset Value ('NAV') as at 30 September 2021
And Trading Update
Ediston Property Investment Company plc (LSE: EPIC) (the
'Company') announces its unaudited NAV at 30 September 2021, which
will form the basis for the year end accounts.
Quarter Summary
-- NAV per share at 30 September 2021 of 89.61 pence (30 June
2021: 87.19 pence), an increase of 2.78% in the quarter.
-- Fair value independent valuation of the property portfolio at
30 September 2021 of GBP283.35 million, a like-for-like increase of
2.4% compared to the valuation at 30 June 2021.
-- Retail warehouse values continued to improve, but these gains
were partially offset by a reduction in value of the office
portfolio.
-- NAV total return (including dividends) for the quarter of 4.2% (30 June 2021, 4.9%).
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-- In line with the strategy to focus the next phase of
investment in the retail warehouse sector, the Company acquired
Springkerse Retail Park in Stirling for GBP21.85 million, a 9.54%
net initial yield.
-- Springkerse Retail Park provides GBP2.23 million of additional income per annum.
-- Completed a new letting to Superdrug at Widnes, with the park now 100% let.
-- Post period end, a further three lease transactions have either exchanged or completed.
--------------------------------------------------------------------------------------
-- In line with the investment strategy announced by the Company
last quarter, discussions are at an advanced stage with regards to
the sale of the office assets.
-- Rent collection continues to improve and the dividend is
still well-covered. It remains the Board's expectation that it
should be able to increase the dividend further in the coming
months.
Net Asset Value
The unaudited NAV of the Company at 30 September 2021 was
GBP189.40 million, or 89.61 pence per share, an increase of 2.78%
on the Company's NAV per share as at 30 June 2021.
Pence Per Share GBP million
NAV at 30 June 2021 87.19 184.26
---------------- ------------
Valuation of property portfolio 13.95 29.49
---------------- ------------
Capital expenditure (11.60) (24.50)
---------------- ------------
Profit on sale of investment
properties 0.00 0.00
---------------- ------------
Income earned 2.10 4.44
---------------- ------------
Expenses & finance costs (0.78) (1.65)
---------------- ------------
Dividends paid (1.25) (2.64)
---------------- ------------
NAV at 30 September 2021 89.61 189.40
---------------- ------------
The NAV attributable to the ordinary shares has been calculated
under International Financial Reporting Standards ('IFRS'); the
EPRA NAV is not reported separately in this update as it is the
same as the IFRS NAV.
The NAV incorporates the independent portfolio valuation as at
30 September 2021 and undistributed income for the quarter, but
does not include a provision for any accrued monthly dividend.
Acquisition of Springkerse Retail Park, Stirling
During the period, the Company acquired Springkerse Retail Park,
Stirling, for GBP21.85 million, in an 'off market' transaction. The
price reflects an initial yield of 9.54%.
Stirling is in central Scotland, 26 miles from Glasgow and 35
miles from Edinburgh. The Stirling Council area has a population of
just under 100,000, which is forecast to grow at an above average
rate, and draws on a primary retail catchment of 228,000 people.
The asset is the dominant retail park in Stirling and extends to
162,593 sq. ft. across 12 units. It is let to 10 tenants and
produces a passing rent of GBP2.23 million per annum.
The Park is anchored by B&Q, with other tenants including
Wren Kitchens, DFS, Pets at Home and Halfords represented on the
site. The asset will benefit from the intensive asset management
style of the Investment Manager. The planned upgrades should
improve the letting potential of the two vacant units (13% by ERV),
providing an opportunity to increase the income stream and drive
capital value upwards. On completion of the letting of these two
vacant units, the yield is expected to rise to 10.8%.
The acquisition was funded using the proceeds from the sale of
the Tesco Superstore in Prestatyn, which was sold for GBP26.5
million (5.2% initial yield). The net operating income from the new
acquisition is 35% higher than the rent received from Tesco, and is
therefore accretive to dividend cover.
Asset management update
Widnes Shopping Park is now 100% let following a new letting to
Superdrug Stores plc. Superdrug has leased a 6,280 sq. ft. unit on
a five-year lease. Post period end, a further three lease
transactions have either exchanged or completed.
At Kingston Retail Park in Hull, the letting to the Range has
completed. The Range has signed a 15-year lease on a 14,500 sq. ft.
unit which was vacated by Outfit (Arcadia) earlier this year. Also
at Hull, Greggs has exchanged an Agreement for Lease on a 2,000 sq.
ft. unit which is leased to, but not occupied by, The Carphone
Warehouse. A lease surrender has been agreed with Carphone
Warehouse. At Prestatyn Shopping Park, The Tech Edge has leased a
vacant unit of 1,300 sq. ft. on a five-year lease. In total, all
these transactions secure GBP322,000 of rent per annum.
The Investment Manager is progressing other new lettings and
lease restructures across the portfolio, which will further improve
the Company's income stream. These will be reported on when
completed.
Rent Collection update and dividend
Rent collection continues to improve, with 99.9% of the rent due
for Q3 2021 expected to be collected. The new acquisition and asset
management deals have further increased the Company's income
stream. Against this backdrop, it remains the Board's expectation
that the dividend will be increased further in the coming
months.
Cash and debt
As at 18 October 2021 the Company had approximately GBP12.8
million of cash available for investment and operational purposes.
The Company also has GBP6.7 million of cash under its debt
facility, ring fenced specifically for investment.
At the date of the September valuation the average loan-to-value
across the Company's two debt facilities was 36.1%. The Company is
fully compliant with all debt covenants and has significant
headroom against income and asset value covenants.
Summary
The positive momentum in the retail warehouse sector last
quarter has continued. Retail warehouse valuations have increased
again, which has helped drive the Company's NAV forward.
The Investment Manager is implementing the new strategy
announced last quarter. It has acquired a retail park in Stirling
and is in advanced discussions with regards to the sale of the
office assets. It is also reviewing various suitable retail
warehouse assets to purchase. Repositioning the property portfolio
remains a key focus, along with continuing to deliver asset
management transactions to add to the Company's income stream.
Further updates will be given in due course, and a more detailed
description of activity will be given in the year end accounts.
William Hill, Chairman, commented:
"The increase in the NAV and completion of more asset management
initiatives continues the positive momentum from the prior quarter.
More investors are coming back into the retail warehouse sector and
if this continues it should enable the NAV progression to
continue."
Portfolio sector weightings and tenant and locational
exposure
Sector
Sector Exposure
(%)
Retail warehouse 74.1
---------
Office 24.2
---------
Other commercial/
Leisure 1.7
---------
Geography
The portfolio is diversified across the regional markets.
Region Exposure
(%)
Scotland 23.4
---------
Wales 20.6
---------
North East 14.5
---------
North West 11.9
---------
West Midlands 11.7
---------
Yorkshire 11.3
---------
East Midlands 4.5
---------
South West 2.1
---------
Top five tenants
Tenant Exposure (%)
B&Q plc 11.7
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B&M Retail Limited 6.2
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Marks & Spencer
plc 5.0
-------------
Ernst & Young LLP 5.0
-------------
Boots UK Limited 3.6
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Forthcoming events
The next interim dividend announcement is expected to be made by
4 November 2021. The next scheduled independent quarterly valuation
of the property portfolio will be conducted by Knight Frank LLP for
31 December 2021, with the unaudited NAV per share at that date
expected to be announced in January 2022.
The Company intends to publish its next factsheet shortly which
will be made available on the Company's website at
www.ediston-reit.com.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon the
publication of this announcement via Regulatory Information
Service, this inside information is now considered to be in the
public domain.
Enquiries
Will Barnett - Investec Bank plc 0207 597 5873
Calum Bruce - Ediston Investment Services Limited 0131 225 5599
Ruth Wright - JTC 0203 893 1011
Ben Robinson - Kaso Legg Communications 0203 995 6672
Stephanie Ross - Kaso Legg Communications 0203 995 6676
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END
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