CTPT Ct Property Trust Limited

To:                   Company Announcements

Date:                27 January 2020

Company:        BMO Real Estate Investments Limited

LEI:                  231801XRCB89W6XTR23

Subject:           Net Asset Value

Net Asset Value

The unaudited net asset value per share of BMO Real Estate Investments Limited (“BREI”) as at 31 December 2019 was 102.6 pence. This represents a decrease of 1.3 per cent from the net asset value per share as at 30 September 2019 of 104.0 pence and a NAV total return for the quarter of -0.1 per cent.

The net asset value is based on the external valuation of the Group's property portfolio prepared by Cushman & Wakefield.

The net asset value is calculated under International Financial Reporting Standards ("IFRS").

The net asset value includes all income to 31 December 2019 and is calculated after deduction of all dividends paid prior to that date.  It does not include a provision for the dividend for the quarter to 31 December 2019, which is expected to be paid in March 2020.

Share Price

The share price was 84.0 pence per share at 31 December 2019, which represented a discount of 18.1 per cent to the NAV per share announced above. The share price total return for the quarter was 4.5 per cent.

Breakdown of NAV movement

Set out below is a breakdown of the change to the unaudited net asset value per share calculated under IFRS over the period from 30 September 2019 to 31 December 2019.

* The un-geared decrease in the valuation of the property portfolio over the quarter to 31 December 2019 was 0.7%.

The net gearing as at 31 December 2019 was 24.2% #

# Bank debt (less net current assets) divided by fair value of investment properties

Performance

The Company’s property portfolio delivered an ungeared total return of 0.5 per cent over the quarter to December, outperforming the MSCI UK Monthly Property Index which delivered 0.3 per cent over the same period. The capital returns on the portfolio were -0.8 per cent, versus a 1.0 per cent fall in the MSCI UK Monthly Property Index for standing investments. Income of 1.3 per cent remains the key driver of returns.

Occupational demand for the Company’s property remains resilient and the portfolio has a void rate of 2 per cent at the calendar year end, with the vacancy being entirely on account of the refurbishment of an office property where a pre-let to the government on part of the property has already been contractually agreed. The average weighted unexpired lease term remains c.6 years.

Office and Industrial continue to deliver positive returns, with the offices returning 2.8 per cent over the quarter and industrial returning 1.4 per cent. Both segments of the portfolio recorded capital value growth as a result of positive sentiment for those markets and underlying asset management initiatives.  Office assets make up 29 per cent of the total portfolio with the Industrials (all located in the South East) now 42 per cent of the portfolio by value.

Standard Retail, 11.7 per cent of the portfolio by value at December suffered capital value falls of 5.0 per cent with the Company’s retail warehouse assets, 17.7 per cent of assets by value, falling 3 per cent. Despite recent transactional evidence supporting at least some liquidity for retail assets, sentiment remains particularly negative towards this sector, with continued uncertainty from the occupier markets and overall transaction volumes depressed.

Property Sales

During the quarter, the Company successfully completed the disposal of two retail assets for £13.65 million, against a backdrop of challenging market conditions for the sector.

The first, a multi-let high street block on the Parade and Warwick Street in Leamington Spa was sold for £6.9 million in November 2019. The asset comprises 12 retail units occupied by tenants including McDonalds, Tiger and Savers, with an average lease term of 2.8 years to break.

The second, a retail warehouse in Rotherham, was sold for £6.75 million in December 2019 to an owner occupier. The unit was occupied by Homebase under the terms of their August 2018 CVA.

In aggregate these sales were secured at 1 per cent below the Q3 2019 market valuation.

The conclusion of these disposals continues the good progress that has been made in prudently down-weighting exposure to the retail sector. Proceeds will be used to fund asset management initiatives, opportunistic acquisitions and the reduction of borrowings.

Summary Balance Sheet

The property portfolio will next be valued by an external valuer during March 2020 and the net asset value per share as at 31 March 2020 will be announced in April 2020.

This announcement contains inside information.

Enquiries:

The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL
Tel: 01481 745001
Fax: 01481 745051

Peter Lowe
Scott Macrae

BMO Investment Business Ltd
Tel: 0207 628 8000
Fax: 0131 225 2375