BMO Real Estate Investments Ltd - Net Asset Value(s)
PR Newswire
London, July 30
To: Company Announcements
Date:31 July 2019
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 30 June 2019 was 104.9 pence. This represents a decrease of 1.1 per cent from the net asset value per share as at 31 March 2019 of 106.0 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 30 June 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 30 June 2019, which is expected to be paid in September 2019.
Share Price
The share price was 80.0 pence per share at 30 June 2019, which represented a discount of 23.7 per cent to the NAV per share announced above. The share price total return for the quarter was -7.4 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 31 March 2019 to 30 June 2019.
| Pence per share | % of opening NAV | |
| Net asset value per share as at 31 March 2019 | 106.0 | |
| Unrealised movement in valuation of property portfolio (including the effect of gearing) | (1.0) | (1.0)* |
| Movement in revenue reserves | (0.1) | (0.1) |
| Net asset value per share as at 30 June 2019 | 104.9 | (1.1) |
* The un-geared decrease in the valuation of the property portfolio over the quarter to 30 June 2019 was 0.7%.
The net gearing as at 30 June 2019 was 26.4% #
# Bank debt (less net current assets) divided by fair value of investment properties
Performance
The property portfolio delivered an ungeared return of 0.6 per cent over the quarter to June matching that of the MSCI UK Monthly Property Index. The capital value of the portfolio decreased by 0.7 per cent, in line with the 0.7 per cent fall in the MSCI UK Monthly Property Index for standing investments over the same period.
Standard retail and Retail Warehousing assets, accounting for a combined 33.9 per cent of the portfolio, were worst hit, with capital value falls of 3.6 per cent and 1.6 per cent respectively. Investor sentiment remains particularly negative towards the retail sector in light of further poor news from the occupational market. Transaction volumes generally have been depressed over the first half of the year but are particularly so for this segment of the market with Shopping Centres and Department Stores, which the Company does not hold, worse hit still.
Overall, the Office values, which make up 26.4 per cent of the portfolio were flat over the quarter, although there was continued encouraging news from the central London sub market and asset specific performance from the Company's largest asset at 14 Berkeley Street, London. Industrials experienced marginal capital value increases. 39.7 per cent of the portfolio comprises Industrial assets located within the south east which continue to deliver both capital and underlying income growth.
Occupational demand remains robust with a portfolio vacancy of 0.1 per cent, a historic low for the Company, bolstered by the positive contribution from asset management initiatives undertaken over the calendar year to date. The average weighted unexpired lease term is 5.8 years.
| Portfolio Analysis | £m | % of portfolio as at 30 June 2019 | % capital value movement in quarter |
| Offices | 90.8 | 26.4 | 0.0 |
| West End | 29.2 | 8.5 | 2.8 |
| South East | 27.5 | 8.0 | (1.6) |
| Rest of UK | 34.1 | 9.9 | (1.0) |
| Industrial | 136.3 | 39.7 | 0.4 |
| South East | 136.3 | 39.7 | 0.4 |
| Standard Retail | 51.2 | 14.9 | (3.6) |
| West End | 8.4 | 2.4 | - |
| Rest of London | 3.0 | 0.9 | (2.4) |
| South East | 15.1 | 4.4 | (8.1) |
| Rest of UK | 24.7 | 7.2 | (2.1) |
| Retail Warehouse | 65.3 | 19.0 | (1.6) |
| Rest of UK | 55.5 | 16.2 | (1.9) |
| Rest of London | 9.8 | 2.8 | - |
| Total Property | 343.6 | 100.0 | (0.7) |
Property Purchases and Sales
There were no sales or purchases in the quarter.
Post period the Company disposed of a high street retail asset in Kings Heath, Birmingham for £2m. This was at premium to the both the previous quarters valuation and the 2018 valuations for the asset.
Summary Balance Sheet
| £m | Pence per share | % of Net Assets | |
| Property Portfolio per Valuation Report | 343.6 | 142.7 | 136.0 |
| Adjustment for lease incentives | (4.2) | (1.7) | (1.6) |
| Fair Value of Property Portfolio | 339.4 | 141.0 | 134.4 |
| Cash | 9.8 | 4.1 | 3.9 |
| Trade and other receivables | 6.8 | 2.8 | 2.7 |
| Trade and other payables | (7.0) | (2.9) | (2.8) |
| Interest-bearing loans | (96.5) | (40.1) | (38.2) |
| Net Assets at 30 June 2019 | 252.5 | 104.9 | 100.0 |
The property portfolio will next be valued by an external valuer during September 2019 and the net asset value per share as at 30 September 2019 will be announced in October 2019.
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
