Quarterly Factsheet - Nov 05
Insight Foundation Property Tst Ltd
22 November 2005
Insight Foundation Property Trust Limited
Quarterly Factsheet - Number Six, November 2005
NAV 108.9 pence (30 September 2005)
Total Shares Issued 353,560,000
Mid share price 112 pence (30 September 2005)
Gross Property Value £439 million (30 September 2005)
Number of properties 73
Average lot size £6.01 million
Average lease length 8.3 years
Ex dividend dates 25 January 2006
Next financial year end 31 March 2006
Current Debt £152.5m
Arranger NM Rothschild
Gearing 26.7% 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
The Company has been admitted into the FTSE 250 and now has approximately 1,000
investors, with over 70% of the shares held by external investors in a 'free
float'. As at 30 September 2005 and prior to the dividend payment, the NAV of
the Company increased to 108.9 pence per share. This reflects an uplift of 2.5
pence per share, or 2.3% over the last three months. Since the launch of the
Company in July 2004 the Company's NAV has increased by 11.4 pence per share.
Over the 12month period to September, combined with the dividend Shareholders
have received a NAV total return of approximately 14.5%. The negative accounting
impact of marking the Company's debt to market has reduced from June to 1.5
pence per share. The stated NAV of 108.9 pence per share takes this negative
impact into account. The September valuation was £439 million, reflecting a
2.63% like for like capital uplift over the June valuation. The Company will pay
a fifth dividend of 1.6875 pence on 2 December.
The Company's underlying property portfolio produced an ungeared total return of
17% for the 12 months to September, taking account of all transaction costs.
Following recent transactions the Company now has property assets totalling
£481.645 million. As at 14 November 2005 the Company's share price was 112.75
pence, reflecting a premium to NAV of 3.5%.
Portfolio Activity
Since the last Factsheet and in accordance with strategy, a London office
property has been acquired for £45 million and a retail property has been sold
for a material premium. Significant progress is being made in the pro-active
asset management of the portfolio, particularly in relation to reducing the
already low void rates.
Portfolio Structure
The portfolio structure incorporates valuation data as at September 2005, as
well as the recent transactions.
Retail 26%
Office 50%
Industrial 24%
The Trust has maintained a balanced and diversified profile with 73 assets
spread across the country in the retail, office and industrial sectors. Recent
acquisitions have decreased the weighting of the retail and industrial sectors
in favour of increasing investment into the office sector, particularly in
central London.
Central London 24%
South East excl. CL 36%
Rest of South 9%
Midlands and Wales 19%
North and Scotland 12%
Property market performance
The third quarter of 2005 witnessed continued strong performance, with the IPD
Monthly Index reporting a total return of 4.4%, with a year to date total return
of 12%.
Capital growth (over the quarter) of 3% was the same as the quarter to June at
3% with industrial property returns reducing. Capital growth continues to be
mainly driven by investor demand, with particular pressure in the Central London
office markets. Insight are forecasting total returns for the market for 2005 of
over 15%.
Asset management highlights
Acquisitions
On the 7th November the Company completed the acquisition of National Magazine
House in Soho for £45.05 million. The freehold property benefits from 16,000 sq
ft floors and is prominently located at the junction of Carnaby Street and
Broadwick Street, arguably one of the best office locations in Soho.
The property is let for a further 13 years to the strong covenant of The
National Magazine Company Limited, the UK subsidiary of Hearst Corporation. The
property also benefits from leased residential units above the offices. The
price reflects a net income yield of 5.3% and the offices are let at a low rent
of £39.90 per sq ft which is capable of good future growth. There is an
opportunity to review the rent upwards in 2008 that we believe is well timed to
benefit from rental growth in the West End and a shortage of good quality
buildings offering large, clear floors in Soho. We have approximately £70
million of equity available for investment and a number of opportunities are
being considered, with further announcements expected shortly.
Disposals
Early in November, the Company disposed of its retail unit at Thames Street in
Kingston-upon-Thames for £2.5m. This followed a lease extension being granted to
Edinburgh Woollen Mill 23% ahead of the current rent. The net profit relative to
the acquisition price in July 2004 of £1.72 million was over £500,000, after all
associated costs.
Active Management
The Quadrant, Bradley Stoke, Bristol
When the Company acquired the industrial estate in July 2004 for £8.58 million,
it produced an annual rent of £495,000 per annum relative to an estimated rental
value of £680,000. The average lease length was 9 years. A pro-active asset
management approach has materially improved the estate and planning consent was
obtained for a car hire use at a premium rent.
The total annual rent has increased to £550,000 per annum with the average lease
length increasing to over 11 years. Creating the new rental level has increased
the rental value to £715,000 which has in turn increased capital values to £9.8
million; an uplift of 14%.
High Street, Scunthorpe
This property was let to WH Smith until 2006, who were not in occupation. A new
15 year lease was negotiated with The Works bookshop at an increased rent. The
property value increased to £1.16 million as a result reflecting a capital
uplift of 8.4% relative to the purchase price of £1.07 million in July 2004.
Largest Ten Holdings Value %*
National Magazine House, Carnaby Street £45,200,000 8.1%
Minerva House, 5&6, Montague Close, London £43,500,000 7.8%
Victory House, Trafalgar Place, Brighton £17,700,000 3.2%
Reynard Business Park, Brentford £17,300,000 3.1%
20/22, Tudor Street, London £17,100,000 3.1%
The Albion Centre, Bath Street, Ilkeston £14,200,000 2.5%
Olympic Office Centre, 8 Fulton Road, Wembley £13,650,000 2.4%
Union Park, Fifers Lane, Norwich £13,450,000 2.4%
The Gate Centre, Syon Gate Way, Brentford £10,800,000 1.9%
Mid City Place, High Holborn £10,150,000 1.8%
Total £203,050,000 36.3%
*Percentage of Gross Asset Value
Largest Ten Tenants Rent %
National Magazine Company Limited £2,250,000 7.4%
Australia & New Zealand Banking Group Ltd £1,460,000 4.8%
Mott MacDonald Ltd £1,307,148 4.3%
Reed Smith Services £1,295,374 4.3%
Freshfields Services Company £1,279,600 4.2%
The British Broadcasting Corporation £826,000 2.7%
Grand Metropolitan Estates Ltd £795,975 2.6%
Recticel SA £713,538 2.4%
Jarvis Porter (Property Holdings) Ltd £700,000 2.3%
Concept Automotive Services Ltd £515,970 1.8%
Total £11,143,605 36.8%
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
Insight Investment Management (Global) Limited. Registered office 33 Old Broad
Street, London EC2N 1HZ.
Registered in England and Wales. Registered number 827982. Authorised and
regulated by the Financial Services Authority.
03383-11-05
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 a
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
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