TIDMIPT
RNS Number : 2380S
ISIS Property Trust Limited
16 November 2011
ISIS Property Trust Limited
Interim Management Statement
For the Three-Month Period from 1 July 2011 to 30 September
2011
Investment Objective
The investment objective is to provide shareholders with an
attractive level of income together with the potential for capital
and income growth from investing in a diversified UK commercial
property portfolio.
Performance Summary
For the three For the nine
month period month period
ended 30 ended 30
September September
Total Return * 2011 2011
Net asset value per
share (0.7)% 1.0%
Ordinary share price 1.9% (0.2)%
Investment Property
Databank UK Quarterly
and Monthly Index Funds 1.9% 6.4%
Portfolio ungeared
return 1.8% 2.9%
FTSE All-Share Index (13.5)% (10.9)%
As at As at
30 September 30 June
Capital Values - 3 2011 2011 % Change
months
Net asset value per
share 98.5p 101.2p (2.6)%
Ordinary share price 99.4p 99.5p (0.1)%
FTSE All-Share Index 2,654.38 3,096.72 (14.3)%
Premium/(discount)
to net asset value 0.9% (1.6)%
Net gearing # 34.6% 35.8%
As at As at
30 September 31 December
Capital Values - 9 2011 2010 % Change
months
Net asset value per
share 98.5p 103.4p (4.7)%
Ordinary share price 99.4p 105.8p (6.0)%
FTSE All-Share Index 2,654.38 3,062.9 (13.3)%
(Discount) / premium
to net asset value 0.9% 2.3%
Net gearing # 34.6% 31.0%
Sources: F&C Investment Business Limited, Investment
Property Databank ('IPD'), Datastream.
* - All total returns are based on net dividends re-invested
# - Gearing: Bank debt (less net current assets) / fair value of
investment properties
Dividends
A second interim dividend for the year ending 31 December 2011
of 2.0 pence per share was paid on 26 August 2011 to shareholders
on the register on 5 August 2011.
A third interim dividend for the year to 31 December 2011 of 2.0
pence per share will be paid on 25 November 2011 to shareholders on
the register on 11 November 2011. In the absence of any unforeseen
circumstances, the Board expects to pay a total dividend of 8.0
pence per share for the year ending 31 December 2011.
Review of the third quarter
Property Market Overview
The third quarter of 2011 registered a total return of 1.9%, as
measured by the IPD Quarterly Index. In the first three quarters of
2011, property delivered a total return of 6.4%.
Total returns have edged lower, on a quarterly basis, during the
course of 2011 as the pace of inward yield movement slowed. This
has been reflected in a deceleration in capital growth over the
past nine months with capital values registering a 0.4% uplift in
3Q 2011 and 2% for the January-September 2011 period. Rental growth
remains subdued at 0.1% in the latest quarter and 0.6% in the first
nine months of the year.
The latest quarter has seen retail property come under some
pressure, with the shops market particularly affected. The
difference in performance between Central London and provincial
offices has persisted but the latest quarter has seen some cooling
in the City office market to narrow the gap. The industrial sector
slightly outperformed in the latest quarter following a period of
relative weakness; the improvement was driven by higher total
returns for standard industrial property in the South East.
Prime property has continued to outperform secondary stock in
most segments of the market.
Portfolio Overview
The value of the Company's portfolio as at 30 September 2011 was
GBP128.5m. During the quarter, the portfolio produced an income
return of 1.8%, ahead of the benchmark income return of 1.4%. With
the total capital value of the portfolio remaining unchanged, total
returns for the quarter were 1.8% broadly in line with the IPD
Quarterly Index return of 1.9%.
The majority of the performance during the quarter derived from
the Company's office properties. The Company's best performing
asset during the quarter was 14 Berkeley Street, London where the
value increased to GBP15.7m due to a number of asset management
initiatives including the refurbishment of the 1st and 4th floors.
A letting of the 4th floor at a rent equating to GBP75 per sq ft
has been completed and terms have also been agreed to let the 1st
floor. Relative performance, however, was held back by industrial
properties, particularly those with shorter lease lengths.
The Company sold 3-5 Church Street, Kingston Upon Thames, which
was let to Telefonica O2 Limited until March 2020 at GBP146,200pa,
for GBP2.96m representing a net initial yield of 4.66%. The sale
price was in excess of valuation and 41% above the original book
value.
During the quarter there were no purchases of property; however,
as previously announced, Halls Mill Retail Park in Bury was
purchased in June 2011 at a price of GBP7.05 million, a net initial
yield of 6.95%. The retail park is fully let and at 30 September
2011 the value increased to GBP7.6m.
Several value-adding lease events have been completed, including
the restructuring of two leases at Foundry Lane, Horsham which
improved the average weighted unexpired income of this asset to 7.2
years. At 15 London Road, Redhill, following the completion of an
RPI rent review, the rent increased by 16% to GBP244,781 pa.
At 30 September 2011, the Company's portfolio had a relatively
low void rate of 3.7% of ERV compared with the IPD benchmark of
8.6%. The average unexpired lease length was 8.9 years, assuming
all breaks exercised.
Top Ten Holdings
30/09/2011
Percentage
of portfolio
Property Sector
London W1, 14 Berkeley
Street Offices 12.5
Chelmsford, County House,
County Square Offices 7.7
Luton, Enterprise Way Retail warehouses 6.6
New Malden, 7 Beverley
Way Retail warehouses 6.1
Halls Mill Retail Park,Bury Retail warehouses 6.1
Andover, Keens House,
Anton Mill Offices 5.7
Hull, King William House,
Market Place Offices 5.0
St Alabans,16,18&20 Upper
Marlborough Road Offices 4.8
Weybridge, Unit D300,
Brooklands Industrial
Estate Industrial 4.7
Bracknell,1/2 Network
Bracknell, Eastern Road Industrial 4.7
Total 63.9%
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Geographical Analysis
30/09/2011 30/06/2011
Percentage Percentage
Location of Portfolio of Portfolio
South East 39.3 38.5
Eastern 15.5 15.3
West End 12.2 11.5
Rest of London 9.5 11.5
North West 5.9 5.8
Yorkshire and Humberside 5.8 5.6
South West 4.6 4.6
East Midlands 3.1 3.1
West Midlands 2.8 2.7
North East 1.3 1.4
Total 100.0 100.0
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Sector Analysis
30/09/2011 30/06/2011
Percentage Percentage
Location of Portfolio of Portfolio
Offices 37.2 36.5
Industrial 23.2 23.7
Retail 18.0 18.3
Retail warehouses 21.6 21.5
Total 100.0 100.0
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The Board is not aware of any significant events or transactions
which have occurred since 30 September 2011 and the date of
publication of this statement which would have a material impact on
the financial position of the Company.
Quarterly and Key Information
Further information regarding the Company, including performance
since launch and the most recent annual and interim reports, can be
found at the Company's website www.isispropertytrust.com, or at
www.fandc.com.
This interim management statement has been prepared solely to
provide information to meet
the requirements of the UK Listing Authority's Disclosure and
Transparency Rules.
For further information please contact:
Ian McBryde/Scott Macrae
F&C Investment Business Limited
Tel: 0207 628 8000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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