Quarterly Factsheet No 7
Insight Foundation Property Tst Ltd
28 March 2006
Quarterly Factsheet - Number Seven, March 2006
Insight Foundation Property Trust Limited
NAV 114.01 pence (31 December 2005)
Total Shares Issued 353,560,000
Mid share price 125.25 pence (23 March 2006)
Gross Property Value £505 million (31 December 2005)
Number of properties 73 (31 December 2005)
Average lot size £6.91 million (31 December 2005)
Average lease length 8 years (31 December 2005)
Ex dividend dates 3 May 2006
Next financial year end 31 March 2006
Current Debt 152.5m
Arranger NM Rothschild
Gearing 26.3% loan to value
Currency GBP
Registered Office Guernsey
Investment objective
To provide investors with an attractive level of income together with potential
for income and capital growth from investing in UK commercial property.
IFPT performance overview
As at 31 December 2005 and prior to the dividend payment, the NAV of the Company
increased to 114.01 pence per share. This reflects an uplift of 2.5 pence per
share, or 2.3% over the three months to December. Since the launch of the
Company in July 2004 the Company's NAV has increased by 16.51 pence per share.
Over the 12 month period to December, combined with the dividend, shareholders
have received a total NAV return of approximately 17%. The negative accounting
impact of marking the Company's debt to market has again increased to 1.8 pence
per share, and the stated NAV of 114.01 pence per share takes this negative
impact into account.
The Company paid its sixth dividend of 1.6875 pence per share on 17 February
2006. Following a share placing during the quarter by Clerical Medical, the
Company now has a 100% free float.
The December valuation was £505 million, reflecting a £20.9 million like for
like capital uplift over the quarter. The performance of the Company's property
portfolio over the 12 months to December 2006 has been independently assessed by
Investment Property Databank ('IPD'). For the period to December the portfolio
produced a total ungeared return of 19.6% relative to its peer group benchmark
of 17.7%. This margin of outperformance was achieved despite materially higher
acquisition costs than the Benchmark average.
Portfolio Activity
Since the last Factsheet and in accordance with the strategy, the Company has
committed to invest almost £50 million in two London offices and exchanged
conditional contracts to acquire a retail warehouse for £11.9m. The Company has
also sold three retail shops at a material premium to valuation following
successful asset management. Significant asset management activity is ongoing
across the portfolio.
Portfolio Structure
The portfolio structure incorporates valuation data as at 31 December 2005,
before the recent acquisitions described below:
Retail 25.8%
Office 49.7%
Industrial 24.5%
The Trust has maintained a balanced and diversified profile with 73 assets
spread across the country in the retail, office and industrial sectors:
Central London 24.1%
South East excl. CL 35.9%
Rest of South 9.4%
Midlands and Wales 18.8%
North and Scotland 11.8%
Property market performance
The IPD Monthly Index for the final quarter of 2005 produced a total return of
6.1%. This represented the UK's strongest quarterly return since May 1993. This
contrasts with the total return from equities and gilts over the same period of
4.3% and 2.2% respectively.
For the year to December 2005 the property market produced a total average
property return of 18.8% that comprised an income return of 6% and capital
growth of 12.2%. This contrasts with equities of 22% and gilts of 7.4%. Across
the sectors, retail produced the strongest return of 19.3%, with offices at
18.4% and industrial at ---
Asset management highlights
Acquisitions
On the 3 March the Company exchanged contracts to fund the development of a
freehold retail warehouse investment in Basingstoke let to Wickes on a new 25
year lease. The funding is conditional on planning. The acquisition reflects a
net income yield of 5.7% and provides retail warehouse exposure at a discount to
current pricing.
On the 17 March the Company exchanged contracts to acquire a £27.55 million
stake in the joint acquisition of Portman Square House, W1. This is a long
leasehold prime office and retail building in a core West End of London location
offering excellent rental growth prospects. The acquisition reflects an
equivalent yield of 5% assuming current rental values.
Finally, on the 21 March the Company completed the acquisition of a 28% stake in
Plantation Place, Fenchurch Street, EC3 for £19.6 million. Plantation Place is a
prime freehold office building in the City of London totalling over 550,000 sq
ft, let to very strong tenants for almost 20 years. The Company has invested
alongside Clients of Insight Investment and an external investor. The
acquisition price of £527 million reflects a property yield of 5.1%. These
acquisitions continue the Company's strategy of acquiring high quality London
offices.
Disposals
The Company has sold three shops in Harrow, Chatham and Scunthorpe at auction
for a total consideration of £4.54 million. The disposals follow asset
management initiatives that improved value, reflecting an uplift of 35% or £1.18
million relative to the July 2004 acquisition prices. The Company will consider
further disposals of small retail property where asset management initiatives
have been completed.
Active Management
Victoria Plaza, Bolton
The Company has been pursuing a strategy of securing a new tenant in the
unoccupied part of this retail property. This has involved a number of separate
negotiations with tenants to improve the planning use and reconfigure the
property. The Company has now obtained planning consent for the proposal and has
in addition exchanged a conditional Agreement for Lease with a major sports
retailer to trade in the upper floors.
MidCity Place, London WC1
A significant lease restructuring of a major tenants lease has been completed to
bring forward rent reviews and restructure leases to increase the rent on the
tenants retained office space by approximately 20% relative to the rental value
on acquisition. This should have a material impact on the next property
valuation.
Largest Ten Holdings Value %*
*Percentage of Gross Asset Value
National Magazine House,10/20,Carnaby
Street,Soho,London,W1 £47,400,000 9.4%
Minerva House,5&6,Montague Close,
London,SE1 £45,300,000 9.0%
Victory House,Trafalgar Place,Brighton £18,500,000 3.7%
20/22,Tudor Street,London,EC4 £18,200,000 3.6%
Reynard Business Park,Brentford £17,800,000 3.5%
Olympic Office Centre,8,Fulton
Road,Wembley £15,840,000 3.1%
The Albion Centre,Bath Street,Ilkeston £14,630,000 2.9%
Union Park,Fifers Lane,Norwich £14,025,000 2.8%
The Gate Centre,Syon Gate Way,Brentford £12,400,000 2.5%
Mid City Place £10,700,000 2.1%
Total as at December 2005 £214,795,000 42.5%
Largest Ten Tenants Rent %
The National Magazine Company Limited £2,270,000 7.6%
Mott MacDonald Ltd £1,307,148 4.3%
Reed Smith Services £1,295,374 4.3%
Freshfields Services Company £1,279,600 4.3%
Australia & New Zealand Banking Group Ltd £1,244,583 4.1%
The British Broadcasting Corporation £830,750 2.8%
Grand Metropolitan Estates Ltd £795,975 2.6%
Recticel SA £713,538 2.4%
Jarvis Porter (Property Holdings) Ltd £700,000 2.3%
Mid City Place £534,852 1.8%
Total rent per annum as at December 2005 £10,791,820 36.5%
Contacts
Broker
JP Morgan Cazenove
20 Moorgate
London, EC2R 6DA
Tel: 020 7588 2828
Richard Cotton
(Managing Director, Corporate Finance)
Angus Gordon Lennox
(Managing Director, Corporate Finance)
Fund Administration
RBSI Fund Services (Guernsey) Limited
PO Box 482
Royal Bank Place
Glategny Esplanade
St Peter Port
Guernsey, GY1 6BH
Tel: 01481 740 820
Paul Smith
(Managing Director, RBSI Guernsey)
Investment Manager
Insight Investment Management (Global) Limited
33 Old Broad Street
London, EC2N 1HZ
Tel: 020 7930 5474
Duncan Owen
(Managing Director, Property)
The Company's website is www.ifpt.co.uk
Issued in accordance with Section 21 of the Financial Services and Markets Act
2000 by Insight Investment Management (Global) Limited. The price of shares and
the income from them may go down as well as up and investors may not get back
the full amount invested on disposal of the shares. Investments in property are
relatively illiquid and more difficult to realise than equities or bonds. Yields
may vary, and are not guaranteed. The use of gearing is likely to lead to
volatility in the Net Asset Value (NAV), meaning that a relatively small
movement either down or up in value of the trust's total assets, will result in
a magnified movement in the same direction, of that NAV. There is no guarantee
that the market price of shares in Investment Trusts will fully reflect their
underlying NAV. This Investment Trust should be considered only as part of a
balanced portfolio, of which it should not form a disproportionate part. Under
no circumstances should this newsletter be considered as an offer, or
solicitation, to deal in the shares of the company. All figures correct as at
30th September 2005. Past performance is not a guide to future performance.
This information is provided by RNS
The company news service from the London Stock Exchange
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