To: Company Announcements
Date: 31 October 2016
Company: F&C Commercial Property Trust Limited
Subject: Net Asset Value
Net Asset Value
The unaudited net asset value ('NAV') per share of the Group as at 30 September 2016 was 132.0 pence. This represents a decrease of 1.6 per cent from the unaudited NAV per share as at 30 June 2016 of 134.1 pence and a NAV total return for the quarter of -0.4 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 September 2016 and is calculated after deduction of all dividends paid prior to that date. As at 30 September 2016 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 123.0 pence per share at 30 September 2016, which represented a discount of 6.4 per cent to the NAV per share announced above. The share price total return for the quarter was 9.4 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 30 June 2016 to 30 September 2016 (including the effect of gearing):
£m | Pence per share | % of opening NAV per share | |
| NAV as at 30 June 2016 | 1,072.3 | 134.1 | |
| Unrealised decrease in valuation of property portfolio * | (12.9) | (1.6) | (1.2) |
| Movement in fair value of interest rate swap | (0.2) | - | - |
| Other net revenue | 8.2 | 1.0 | 0.7 |
| Dividends paid | (12.0) | (1.5) | (1.1) |
| NAV as at 30 September 2016 | 1,055.4 | 132.0 | (1.6) |
* The ungeared decrease in the valuation of the property portfolio over the quarter to 30 September 2016 was 0.9%, after allowing for capital expenditure.
The net gearing at 30 September 2016 was 20.7%.#
# Net gearing: (Borrowings - cash) ÷ total assets (less current liabilities and cash).
Performance
Although the portfolio recorded a valuation decrease of 0.9% this quarter, it performed particularly strongly in comparison with the IPD Monthly Index, which reported capital value falls of 3.6% over the same period.
The portfolio structure was beneficial, having no exposure to shopping centres and only one small building in the City of London.
Successful asset management increased or held valuations. At St Christopher's Place, various new lettings were negotiated on extended lease lengths with enhanced terms.
The industrial and logistics sector helped performance too and further benefitted from a number of ongoing asset management initiatives, some of which completed over the quarter. At Hams Hall, Birmingham a new 10-year lease of unit 10a was contracted at lease renewal and at Unit 8, the tenant's only break was removed, providing certainty of income until 2025.
Other properties in the portfolio did experience capital value falls, of particular note being the retail warehouses, where a combination of negative investor sentiment to the sector and larger lot sizes led the valuers to adjust capitalisation rates.
Portfolio Analysis - Sector Breakdown
| Market Value £m | % of portfolio as at 30 Sept 2016 | % unrealised movement in quarter | |
| Offices | 518.2 | 38.5 | (1.9) |
| West End | 183.1 | 13.6 | (2.6) |
| South East | 130.8 | 9.7 | (2.7) |
| Rest of UK | 185.9 | 13.8 | (0.4) |
| City | 18.4 | 1.4 | (3.5) |
| Retail | 368.9 | 27.4 | 1.0 |
| South East | 368.9 | 27.4 | 1.0 |
| Industrial | 204.1 | 15.2 | 1.7 |
| South East | 47.3 | 3.5 | (0.6) |
| Rest of UK | 156.8 | 11.7 | 2.4 |
| Retail Warehouse | 217.4 | 16.1 | (5.1) |
| Other | 37.6 | 2.8 | 5.9 |
| Total Property Portfolio | 1,346.2 | 100.0 | (0.9) |
Portfolio Analysis - Geographic Breakdown
| Market Value £m | % of portfolio as at 30 Sept 2016 | % unrealised movement in quarter | |
| West End | 485.1 | 36.0 | (0.3) |
| South East | 348.3 | 25.9 | (2.3) |
| Scotland | 170.3 | 12.6 | (0.6) |
| Midlands | 160.5 | 11.9 | 7.3 |
| North West | 138.7 | 10.3 | (2.5) |
| Eastern | 24.9 | 1.9 | (1.1) |
| Rest of London | 18.4 | 1.4 | (3.5) |
| Total Property Portfolio | 1,346.2 | 100.0 | (0.9) |
Top Ten Investments
| Sector | |
| Properties valued in excess of £200 million | |
| London W1, St Christopher's Place Estate * | Retail |
| Properties valued between £70 million and £100 million | |
| Newbury, Newbury Retail Park | Retail Warehouse |
| London SW1, Cassini House, St James's Street Solihull, Sears Retail Park | Office Retail Warehouse |
| Properties valued between £50 million and £70 million | |
| London SW19, Wimbledon Broadway | Retail |
| London W1, 25 Great Pulteney Street | Office |
| Properties valued between £40 million and £50 million | |
| Uxbridge, 3 The Square, Stockley Park Crawley, Leonardo House, Manor Royal | Office 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 and residential space.
Summary Balance Sheet
| £m | Pence per share | % of Net Assets | |
| Property Portfolio per Valuation Report | 1,346.2 | 168.4 | 127.6 |
| Adjustment for lease incentives | (16.6) | (2.1) | (1.6) |
| Fair Value of Property Portfolio | 1,329.6 | 166.3 | 126.0 |
| Current Debtors | 21.6 | 2.7 | 2.0 |
| Cash | 34.1 | 4.3 | 3.2 |
| Current Liabilities | (21.1) | (2.7) | (2.0) |
| Total Assets (less current liabilities) | 1,364.2 | 170.6 | 129.2 |
| Interest-bearing loans | (307.3) | (38.4) | (29.1) |
| Interest rate swap | (1.5) | (0.2) | (0.1) |
| Net Assets at 30 September 2016 | 1,055.4 | 132.0 | 100.0 |
Property Purchases and Sales
There were no sales or purchases during the quarter.
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.
The Group's weighted cost of debt is therefore 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 www.fccpt.co.uk.
The next quarterly valuation of the property portfolio will be conducted by CBRE Limited during December 2016 and it is expected that the unaudited NAV per share as at 31 December 2016 will be announced in January 2017.
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
