TIDMIPT
RNS Number : 6746D
ISIS Property Trust Limited
18 May 2012
ISIS Property Trust Limited
Interim Management Statement
For the Three-Month Period from 1 January 2012 to 31 March
2012
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
month period
ended 31
Total Return * March 2012
Net asset value per
share +1.5%
Ordinary share price +1.5%
Portfolio total return
per IPD +1.2%
IPD UK quarterly and
monthly funds index +0.8%
FTSE All-Share Index +6.1%
As at As at
31 March 31 December
Capital Values - 3 2012 2011 % Change
months
Net asset value per
share 98.2p 98.7p -0.5%
Ordinary share price 90.0p 90.6p -0.7%
FTSE All-Share Index 3,002.8 2,857.9 +5.1%
Discount to net asset
value (8.4)% (8.2)%
Net gearing # 35.3% 36.1%
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
The fourth interim dividend for the year to 31 December 2011 of
2.0 pence per share was paid on 24 February 2012, giving dividends
paid for the year to 31 December 2011 of 8.0 pence per share. A
first interim dividend of 2.0 pence per share for the year to 31
December 2012 will be paid on 25 May 2012. The Board remains
comfortable with the Company's position relative to its banking
covenants and with its level of income collection. It is therefore
pleased to confirm that, in the absence of unforeseen
circumstances, it intends to continue to pay quarterly interim
dividends of 2.0 pence per share.
Review of the first quarter
Property Market Overview
The first quarter of 2012, saw property deliver a total return
of 0.8 per cent, as measured by the IPD Quarterly Index. Both
capital and rental values came under pressure delivering minus 0.7
per cent and zero respectively during the three month period for
standing investments. The slippage has affected most parts of the
market but has been more pronounced for shopping centres and is
starting to spread to the south-east.
With the UK moving into a technical recession and the problems
in the Eurozone persisting, both occupiers and investors have
remained cautious. Rental growth has been patchy at best and
focused on London, occupational demand is largely driven by lease
events and void levels have risen. New supply however remains low,
constrained by weak occupier demand and restricted finance for
development.
Investors continue to favour prime property, tightly defined.
There has been some outward pressure on yields especially for
retail, in the regions and at the secondary end of the market.
Central London has continued to out-perform the regions.
Investment activity was lower in the quarter, after a strong end
to 2011. It remains driven by overseas buyers who are often focused
on larger lot sizes and Central London; elsewhere the market is
weaker. The banks are slowly instigating more sales as they reduce
their exposure to property but this unwinding still has some way to
go.
Portfolio Overview
The value of the Company's portfolio as at 31 March 2012 was
GBP128.9m. During the quarter, the portfolio produced an income
return of 1.7%, ahead of the benchmark income return of 1.4%. In
terms of capital value, total returns for the quarter were minus
0.5% which was marginally ahead of the benchmark of minus 0.6%.
The majority of the performance during the quarter derived from
the successful implementation of asset management initiatives
across the Company's office and industrial portfolios. Relative
performance, however, was held back by high street retail
properties, particularly those with shorter lease lengths in weaker
locations.
The value of 14 Berkeley Street, London, W1 increased to just
over GBP17million following completion of a number of asset
management initiatives including the refurbishment and letting of
the 5th floor at a rent equating to GBP75 per sq ft. Additionally
the lease of the ground floor car showroom was re-geared with the
expiry date extended by 10 years to March 2025. As part of this
re-gear, the rent was also increased from GBP180,000 to GBP200,000
pa with a fixed uplift in March 2013 to GBP210,000 pa. The property
is now fully let and was the biggest contributor to portfolio
performance.
Within the industrial portfolio, Unit 2 Network, Bracknell was
let to Proctor & Gamble for 10 years, subject to a 5 year
break, at a rent of GBP223,000 pa. This was achieved within 3
months of the unit becoming vacant. At King George Close, Romford
the lease term has been extended by a further 10 years giving an
unexpired lease term of 15 years in return for a 9 month rent free
period, with the rent remaining at GBP185,000 pa.
There were no purchases of property during the quarter however
the Company did take advantage of the investor appetite for South
East real estate by agreeing terms to sell Unit D 300 at Brooklands
Industrial Estate for GBP6.35 mil compared to the valuation of
GBP6.975 million. The sale completed on 23 April 2012.
At 31 March 2012, the Company's portfolio had a low void rate of
1.4% of ERV compared with the IPD benchmark of 8.3%. The average
unexpired lease length was 8.7 years, assuming all breaks
exercised.
Top Ten Holdings
31/03/2012
Percentage of
Portfolio
Property Sector
London W1, 14 Berkeley
Street Offices 13.2
Chelmsford, County House,
County Square Offices 7.8
Luton, Enterprise Way Retail warehouses 6.4
New Malden, 7 Beverley Retail warehouses 6.0
Way
Bury, Halls Mill Retail Retail warehouses 5.9
Park,
Foundry Street
Andover, Keens House,
Anton Mill Offices 5.7
Bracknell, 1/2 Network
Bracknell, Eastern Road Industrial 5.0
Hull, King William House,
Market Place Offices 4.9
St. Albans, 16,18 & 20
Upper Marlborough Road Offices 4.7
Weybridge, Unit D300,
Brooklands Industrial
Estate Industrial 4.6
Total 64.2
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Geographical Analysis
31/03/12 31/12/11
Percentage Percentage
Location of Portfolio of Portfolio
South East 39.2 39.0
Eastern 15.2 15.4
London West End 13.2 12.8
Rest of London 9.5 9.5
North West 5.9 5.9
Yorkshire and Humberside 5.8 5.7
South West 4.3 4.5
East Midlands 3.0 3.1
West Midlands 2.9 2.9
North East 1.0 1.2
Total 100.0 100.0
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Sector Analysis
31/03/2012 31/12/2011
Percentage Percentage
Location of Portfolio of Portfolio
Offices 37.9 37.6
Industrial 23.4 23.1
Retail Warehouse 21.5 21.4
Retail 17.2 17.9
Total 100.0 100.0
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The Board is not aware of any significant events or transactions
which have occurred since 31 March 2012 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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Isis Property Trust (LSE:IPT)
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