Disposal

RNS Number : 7810O

Invista Foundation Property Tst Ltd

12 March 2009

 



12 March 2009

Invista Foundation Property Trust Limited 

(the "Company" / "Group")

ANNOUNCEMENT OF DISPOSALS AND SUCCESSFUL ASSET MANAGEMENT INITIATIVES

Following the announcement of the Net Asset Value as at 31 December 2008 made on 28 January 2009, the Company has exchanged contracts to sell two properties and also made further progress on income enhancing asset management initiatives.

Disposals

The Company has exchanged contracts to dispose of National Magazine House, London W1, an office and residential building mainly let for a further 9.5 years to National Magazine Company Limited. The price agreed is £31.4 million with the potential for up to an additional £2 million linked to the outcome of the outstanding rent review dated 28 September 2008.  The price including overage reflects a 6.4% discount to the independent valuation as at 31 December 2008 of £35.7 million.

The Company has also exchanged contracts to dispose of a retail and office property let to Royal Bank  of Scotland in Brighton for a further 12.5 years.  The sale price of £3.5 million reflects a net initial yield of 5.7% and a premium of 25% above the 31 December 2008 valuation of £2.8 million.  

Following completion of these disposals the Company will have sold £107 million of assets since the announcement of its Strategic Review in July 2008.

Asset management

The Company's biggest potential vacancy during 2008 and 2009 was the British Broadcasting Corporation ('BBC') at Reynards Business Park, Brentford, an industrial estate in West London.  During February 2009  lease agreements have been completed producing an annual rent of £702,000 for a further four years, with a tenant only break option after two and a half years. The new rental level reflects an uplift of £55,000 per annum or 9% compared to the previous rent and provides the Company with time to consider alternative, higher value uses at the site.

The Company continues to achieve rental uplifts in excess of the assumed independent valuation levels.  At The Galaxy in Luton, a rent review has been settled with Cineworld increasing the annual rent to  £452,000 from £321,000, an uplift of 41%.  

Portfolio impact

Following the disposals and based on the independent valuation as at 13 December 2008, the Company will have a property portfolio valued at £332.4 million comprising 62 assets with an average lot size of £5.36 million.  

Following the disposals and asset management activity the portfolio rent is £24.9 million per annum reflecting a net initial yield of 7.0%, after allowing for normal purchase costs of 5.75%.  Following the expiry of contractual rent free periods during 2009 this will rise to £26.5 million and a net initial yield of 7.4%. The net reversionary yield for the portfolio is 8.4%.

The impact on the sector and geographic weightings by capital value across the Company's direct property portfolio are shown below:

Sector	Weighting - 31/12/08	Weighting - Post sales
Retail	22.8%	25.4%
Offices	50.5%	44.8%
Industrial	22.6%	25.2%
Other	4.1%	4.6%
Total	100%	100%

Region	Weighting - 31/12/08	Weighting - Post sales
Central London	21.6%	13.3%
South East excl. Central London	42.2%	46.2%
Rest of South	11.1%	12.4%
Midlands and Wales	16.4%	18.4%
North and Scotland	8.7%	9.7%
Total	100%	100%

Finance

Following completion of the disposals and before any overage at National Magazine House the Company will have £81.7 million of cash and a loan to value ratio of approximately 40% with cash netted of debt, based on the portfolio valuation as at 31 December 2008. 

-ENDS-

For further information:

Invista Real Estate Investment Management Duncan Owen	020 7153 9300
Northern Trust David Sauvarin	01481 745529
Financial Dynamics Dido Laurimore / Rachel Drysdale	020 7831 3113

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