Guernsey: 30 September 2024

 

LEI: 549300HHFBWZRKC7RW84

abrdn Property Income Trust Limited

(“API” or the “Company”)

 

INTERIM RESULTS FOR THE PERIOD ENDED 30 JUNE 2024

 

Today the Board of abrdn Property Income Trust (“API” or the “Company”) confirms the Company’s Interim Results to 30 June 2024. The results will shortly be available to view on the Company's corporate website at https://www.abrdnpit.co.uk/en-gb/literature. 

 

PERFORMANCE SUMMARY

 

 

Earnings, Dividends & Costs

 

 

6 months to

30 June

2024

6 months to

30 June

2023

IFRS (Loss)/gain per share (p)

 

 

(3.0)

0.8

EPRA earnings per share (p) (excl capital items & derivative movements) *

0.7

1.6

Dividends paid per ordinary share (p)

 

2.0

2.0

Dividend Cover (%) **

 

 

36.4

80.6

Dividend Cover excluding non-recurring items (%) **

77.3

80.6

Dividend Yield (%) ***

 

 

7.8

8.4

FTSE All-Share Real Estate Investment Trusts Index Yield (%)

5.0

5.1

FTSE All-Share Index Yield (%)

 

 

4.0

3.7

Ongoing Charges **

 

 

 

 

As a % of average net assets including direct property costs

2.3

2.6

As a % of average net assets excluding direct property costs

1.2

1.1

 

 

 

 

 

Capital Values & Gearing

 

30 June

2024

31 December

2023

Change

%

Total assets (£million)

 

416.7

456.1

(8.6)

Net asset value per share (p)

 

73.3

78.2

(6.2)

Ordinary Share Price (p)

 

51.6

53.0

(2.6)

(Discount)/Premium to NAV (%)

 

(29.6)

(32.2)

 

Loan-to-value (%) 2

 

28.7

30.8

 

 

 

 

 

 

Total Return

6 months

% return

1 year

% return

3 year

% return

5 year

% return

NAV ^

(4.1)

(8.1)

(5.4)

0.8

Portfolio

0.4

(0.7)

4.8

12.5

Share Price ^

1.1

17.2

(10.3)

(24.9)

FTSE All-Share Real Estate Investment Trusts Index

(2.2)

18.1

(12.8)

(3.4)

FTSE All-Share Index

7.4

13.0

23.9

30.9

 

 

 

 

 

Property Returns & Statistics (%)

 

 

30 June

2024

30 June

2023

Portfolio income return

 

 

2.8

2.5

MSCI Benchmark income return

 

 

2.4

2.3

Portfolio total return

 

 

0.4

1.7

MSCI Benchmark total return

 

 

1.8

0.3

Void rate

 

 

10.5

8.6

 

* Calculated as profit for the period before tax (excluding capital items & derivative movements) divided by weighted average number of shares in issue in the period. EPRA stands for European Public Real Estate Association.

 

** As defined and calculated under API’s Alternative Performance Measures (as detailed in the full Interim Accounts which can be found via the following link: https://www.abrdnpit.co.uk/en-gb/literature)

 

*** Based on annual dividend paid of 4.0p and the share price at 30 June 2024 of 51.6p.

 

^ Assumes re-investment of dividends excluding transaction costs.

Sources: abrdn, MSCI

 

The above performance summary information excludes the effects of the transaction with GoldenTree which are explained in the Chairman’s statement.

 

CHAIR’S STATEMENT

 

Background

Following the downward trajectory of UK inflation during the second half of 2023, there were expectations at the start of 2024 that we would see a reasonably swift move towards an interest rate cutting cycle.  What transpired was somewhat different, with inflation lingering doggedly above the Bank of England target until the end of the second quarter.  This uncertainty impacted investor confidence and manifested itself in a reduced level of market activity throughout the first  six months of the year.

 

Since then, we have seen a rate cut at the beginning of August and a feeling, certainly in some sectors of the UK Real Estate market, that investors are feeling more confident.  However, whilst there weren’t any significant global macroeconomic shocks in the first half of 2024 like those we have experienced in recent years, the continuing war in Ukraine and the escalation of tensions in the Middle East could still impact any fragile market recovery.

 

Corporate Activity

As previously reported in the Company’s 2023 Annual Report & Financial Statements, the Board undertook a strategic review in the second half of 2023 prompted by concerns about the Company’s size, lack of liquidity in its shares, the discount to NAV and uncovered dividend. The outcome of this review was that the Board recommended to shareholders that they vote in favour of a proposed merger with Custodian REIT for the reasons outlined in various announcements to shareholders during the first quarter of 2024.  However, this ultimately did not garner enough shareholders of API to vote in favour of the proposal at the Extraordinary General Meeting.

 

Following the vote, shareholders of API were given the opportunity to vote on a proposed change to the Group’s Investment Objective from “The Company’s objective and purpose is to provide Shareholders with an attractive level of income together with the prospect of income and capital growth.” to “The Company’s investment objective is to realise all existing assets in the Company’s portfolio in an orderly manner.”  Included in this change was a revision of the investment management fees to reflect the new Investment Objective and align the interest of the Investment Manager with the sale and return of capital to shareholders. On 28 May 2024, approximately 96% of shareholders (who voted) voted in favour of this proposal and the resolution passed.

 

Since then, alongside the Investment Manager, the Board has explored the most effective means of disposing of the Company’s assets, with the main aim being to obtain the best achievable value for the Company’s assets at the time of their realisation, with a view to repaying borrowings and making returns of capital to shareholders. As the Board has disclosed before, we have looked at all potential disposal strategies, including individual property sales alongside a wider portfolio transaction.  Through an independent agent the whole portfolio was marketed to potential buyers in an extensive and competitive process. Following consideration of these proposals, and what might be achieved by way of individual property sales over a longer period with the associated risks, the Board selected a preferred bidder and has agreed a transaction with GoldenTree Asset Management for the sale of the entire share capital of abrdn property Holdings Limited (APH), the wholly owned subsidiary of the Company.

 

The transaction comprises the sale of 39 assets, being the Company’s entire investment property portfolio, with the exception of its interest in the land at Far Ralia, which will be retained by the Company for sale at a later date, subject to certain approvals. The Company’s debt facility with RBSI will be transferred in full to GoldenTree. Th