To:
Company Announcements
Date:
31 July 2019
Company: BMO Commercial
Property Trust Limited
LEI:
213800A2B1H4ULF3K397
Subject:
Net Asset Value
Net Asset Value
The unaudited net asset value (‘NAV’) per share of the Group as
at 30 June 2019 was 136.3 pence. This represents a decrease of -1.2
per cent from the unaudited NAV per share as at 31 March 2019 of 137.9
pence and a NAV total return for the quarter of -0.1 per
cent.
The NAV has been calculated under International Financial
Reporting Standards (‘IFRS’). It is based on the external valuation
of the Group’s direct property portfolio prepared by CBRE
Limited.
The NAV includes all income to 30 June
2019 and is calculated after deduction of all dividends paid
prior to that date. As at 30 June
2019, no adjustments were required to the NAV in respect of
dividends for which the share price had gone ex-dividend.
Share Price
The share price was 111.80 pence
per share at 30 June 2019, which
represented a discount of 18.0 per cent to the NAV per share
announced above. The share price total return for the quarter was
-5.3 per cent.
Analysis of Movement in NAV
The following table provides an analysis of the movement in the
unaudited NAV per share for the period from 31 March 2019 to 30 June
2019 (including the effect of gearing):
|
£m |
Pence per share |
% of opening NAV per
share |
NAV as at 31 March 2019 |
1,102.6 |
137.9 |
|
Unrealised decrease in valuation of
property portfolio * |
(10.4) |
(1.3) |
(0.9) |
Realised loss on sale of
property |
(0.6) |
(0.1) |
(0.1) |
Movement in fair value of interest
rate swap |
(0.1) |
0.0 |
0.0 |
Other net revenue |
10.3 |
1.3 |
0.9 |
Dividends paid |
(12.0) |
(1.5) |
(1.1) |
NAV as at 30 June 2019 |
1,089.8 |
136.3 |
(1.2) |
* The ungeared decrease in the valuation of the property
portfolio over the quarter to 30 June
2019 was -0.8%, after allowing for capital expenditure.
The net gearing at 30 June 2019
was 20.4%. #
# Net gearing: (Borrowings – cash) ÷ total assets (less current
liabilities and cash).
Market
The market delivered a 0.6 per cent all-property total return in
the quarter ended June 2019 according
to the MSCI UK Monthly Property Index for standing investments.
All-property capital values fell by -0.7% over the three-month
period, with June 2019 representing
the eighth consecutive month of decline.
The retail market continued to be affected by Company Voluntary
Arrangements, administrations and store rationalisation programmes.
The sector delivered a quarterly total return of -0.9 per cent,
with negative returns in most parts of the market. Central London shops were an exception
delivering a modest 0.3 per cent total return.
The office market recorded a 0.9 per cent total return, led by
offices outside Central London.
This is slightly below the rate seen in the previous quarter. The
industrial market continued to drive performance with a 1.7 per
cent total return. This was in line with the previous quarter’s
performance but represents a deceleration from the pace of the
previous few years. The alternatives sector out-performed the
all-property average.
The quarter was notable for the continued weakness in investment
activity. Most parts of the market are now seeing below average
levels of transactions.
Performance is being supported by the income return. This was
unchanged in the quarter at 1.3 percent and was 5.2 per cent on an
annual basis.
Performance
The Company’s portfolio delivered a total return of 0.3 per cent
over the quarter. The capital value of the portfolio decreased by
-0.8 per cent and the income return was 1.1 per cent.
The Company’s retail properties were the worst performing sector
recording a total return of -0.6 per
cent. Within the retail sector, retail warehouses recorded a total
return of -2.4 per cent with both Newbury Retail Park and Solihull
Retail Park experiencing valuation falls of -3.5 per cent and -4.6
per cent respectively. These falls were attributable to market
related capitalisation rates moving out, whilst the estimated
rental values are supported by recent letting progress on the
parks. The Managers continue to work on a number of initiatives to
re-let the units affected by tenant defaults and these are
progressing but still dependent upon securing revised planning
consents.
The Company’s offices were the best performing sector producing
a total return of 1.2 per cent. The portfolio void rate was 5.0 per
cent.
Investment Activity
There were no sales or purchases during the quarter.
Leasing Activity
The letting of Unit 8 (ex-Poundworld) at Newbury Retail Park
completed to Hobbycraft at a rent of £215,578 per annum.
The 4th floor at 7 Birchin Lane was let at a rent of
£152,955 per annum, whilst in July Leica Cameras completed a lease
of the 4th floor at 6-8 James Street at a rent of
£121,500 per annum.
Portfolio Analysis – Sector
Breakdown
|
Portfolio
Value
£m |
% of
portfolio as at
30 June 2019 |
%
like for like capital value shift (excl transactions) |
Offices |
546.6 |
39.5 |
0.3 |
West End |
204.6 |
14.8 |
0.0 |
South East |
91.9 |
6.6 |
1.0 |
South West |
33.4 |
2.4 |
0.0 |
Rest of UK |
196.3 |
14.2 |
0.2 |
City |
20.4 |
1.5 |
-0.1 |
Retail |
309.1 |
22.4 |
-1.0 |
West End |
235.1 |
17.0 |
-1.2 |
South East |
42.3 |
3.1 |
-1.9 |
Rest of UK |
31.7 |
2.3 |
-0.4 |
Industrial |
251.9 |
18.2 |
-0.8 |
South East |
30.1 |
2.2 |
0.0 |
Rest of UK |
221.8 |
16.0 |
-0.9 |
Retail
Warehouse |
146.6 |
10.6 |
-3.5 |
Alternatives |
128.9 |
9.3 |
-0.1 |
Total Property
Portfolio |
1,383.1 |
100.0 |
-0.8 |
Portfolio Analysis – Geographic
Breakdown
|
Market
Value
£m |
% of portfolio as
at
30 June 2019 |
West End |
498.5 |
36.0 |
South East |
298.8 |
21.6 |
Scotland |
174.8 |
12.6 |
Midlands |
164.8 |
11.9 |
North West |
162.7 |
11.8 |
South West |
33.3 |
2.4 |
Eastern |
30.0 |
2.2 |
Rest of London |
20.2 |
1.5 |
Total Property Portfolio |
1.383.1 |
100.0 |
Top Ten Investments
|
Sector |
Properties valued
in excess of £250 million |
|
London W1, St
Christopher’s Place Estate * |
Mixed |
Properties valued
between £100 million and £150 million |
|
London SW1, Cassini
House, St James’s Street |
Office |
Properties valued
between £50 million and £70 million |
|
Newbury, Newbury
Retail Park |
Retail
Warehouse |
Solihull, Sears Retail
Park |
Retail
Warehouse |
London SW19, Wimbledon
Broadway** |
Mixed |
Properties valued
between £40 million and £50 million |
|
Crawley, Leonardo
House, Manor Royal |
Office |
Winchester, Burma
Road |
Alternative |
Manchester, 82 King
St |
Office |
Properties valued
between £30 million and £40 million |
|
Aberdeen, Unit 2 Prime
Four Business Park, Kingswells |
Office |
Aberdeen, Unit 1 Prime
Four Business Park, Kingswells |
Office |
|
|
*Mixed use property of retail, office, food/beverage and
residential space.
**Mixed use property of retail, food/beverage and leisure
space.
Summary Balance Sheet
|
£m |
Pence per
share |
% of Net
Assets |
Property Portfolio |
1,383.1 |
173.0 |
126.9 |
Adjustment for lease incentives |
(21.4) |
(2.7) |
(2.0) |
Fair Value of Property
Portfolio |
1,361.7 |
170.3 |
124.9 |
Debtors |
26.2 |
3.4 |
2.4 |
Cash |
30.0 |
3.7 |
2.7 |
Current Liabilities |
(17.5) |
(2.2) |
(1.6) |
Total Assets (less current
liabilities) |
1,400.4 |
175.2 |
128.4 |
Non-Current liabilities |
(2.1) |
(0.3) |
(0.2) |
Interest rate swap |
(0.2) |
- |
- |
Interest-bearing loans |
(308.3) |
(38.6) |
(28.2) |
Net Assets at 30
June 2019 |
1,089.8 |
136.3 |
100.0 |
Borrowings
The Group’s borrowings consist of a £260 million loan with a
term to 31 December 2024 and a fixed
interest rate of 3.32 per cent per annum. The Group also has a £50
million bank loan with a term to 21 June
2021 on which the interest rate has been fixed, through an
interest rate swap of the same notional value and duration, at
2.522 per cent per annum. In addition, the Board has agreed an
additional revolving credit facility of £50 million with Barclays
over the same period, to be used for ongoing working capital
purposes and to provide the Group with the flexibility to acquire
further property should the opportunity arise. This facility is
currently undrawn.
The Group’s weighted average cost of debt is 3.3 per cent per
annum.
Key Information
This statement and further information regarding the Company,
including movements in the share price since the end of the period
and the Group’s most recent annual and interim reports, can be
found at the Company’s website bmocommercialproperty.com.
The next quarterly valuation of the property portfolio will be
conducted by CBRE Limited during September
2019 and it is expected that the unaudited NAV per share as
at 30 September 2019 will be
announced in October 2019.
This announcement contains inside information.
Enquiries:
Richard Kirby
BMO REP Asset Management plc
Tel: 0207 499 2244
Graeme Caton
Winterflood Securities Limited
Tel: 0203 100 0268