TO:  RNS

FROM:  Balanced Commercial Property Trust Limited

L.E.I.:   213800A2B1H4ULF3K397   

DATE:   04 October 2023

 

 

Dividend Declaration

 

 

(Classified Regulated Information, under DTR 6 Annex 1 section 2.3)

 

Balanced Commercial Property Trust Limited today announces a monthly property income distribution payment in respect of the financial year ended 31 December 2023 of 0.44 pence per share as detailed in the schedule below. As announced on 14 September 2023, this is an increase of 10 per cent on the previous monthly rate of 0.4 pence per share.

 

The key dates for this interim dividend are as follows:

 

Ex-Dividend Date

Record Date

Pay Date

12 October 2023 

13 October 2023 

31 October 2023 

 

All enquiries:

 

The Company Secretary

Northern Trust International Fund Administration Services (Guernsey) Limited Trafalgar Court

Les Banques

St Peter Port Guernsey

GY1 3QL

 

Tel: 01481 745001

Fax: 01481 745051

 

TO:  RNS

FROM:  Balanced Commercial Property Trust Limited

L.E.I.:   213800A2B1H4ULF3K397   

DATE:   27 September 2023

 

 

Subject:  Appointment of Corporate Broker

 

The Board of Balanced Commercial Property Trust is pleased to announce the appointment of Barclays Bank PLC (“Barclays”) as its joint corporate broker, with immediate effect.

Enquiries:

 

The Company Secretary

Northern Trust International Fund Administration Services (Guernsey) Limited Trafalgar Court

Les Banques

St Peter Port Guernsey

GY1 3QL

 

Tel: 01481 745001

Fax: 01481 745051

 

 

Richard Kirby

Columbia Threadneedle REP AM plc

Tel: 0207 499 2244

 

 

 

 

Date:  14 September 2023

From:  Balanced Commercial Property Trust Limited

LEI:  213800A2B1H4ULF3K397

 (Classified Regulated Information, under DTR 6 Annex 1 Section 1.2)

 

Interim Report for the Period ended 30 June 2023

 

Headlines

 

Net asset value total return* of +0.8 per cent for the 6 months ended 30 June 2023 (H1 2022: +11.7 per cent). Share price total return* of -23.0 per cent for the 6 months ended 30 June 2023 (H1 2022: +8.3 per cent). Monthly dividend to be increased by 10.0 per cent to 0.44 pence per share from October 2023. Cash dividend cover was 117.6 per cent (H1 2022: 97.1 per cent) Post period-end the Company signed up to a New Debt Facility provided by incumbent lender Barclays and a new lender HSBC.  Additional information can be found in the Chairman's Statement and Note 14. Portfolio return* of +1.5 per cent over the 6 months to June 2023 versus the MSCI UK Quarterly Property Index return of +0.3 per cent. 40 leasing initiatives contracted over the six-month period, accounting for an income stream of £4.1 million per annum.

 

* See Alternative Performance Measures

 

 

Chairman’s Statement

 

Following a particularly turbulent 2022, the first half of 2023 represented a more stable environment for real estate capital values.

 

While consensus has begun to move away from the UK economy falling into recession, the macroeconomic environment is not overly favourable, with high inflation and high debt costs impacting economic growth. This rise in interest rates has led to less investment activity, and this lack of liquidity within the property capital markets continues to bear on investor sentiment.

 

Whilst most real estate sectors have remained relatively stable throughout 2023 to date, a significant portion of the office sector remains under pressure, experiencing the greatest decline of all sectors in capital values over the six months.  On a brighter note, occupational markets across the other sectors have continued to show resilience and sustained activity despite the wider economic pressures.

 

Company Performance

 

Against this economic and property market backdrop, the Company has delivered a positive net asset value (‘NAV’) total return of 0.8 per cent for the six months. The NAV per share as at 30 June 2023 was 117.1 pence, down 1.2 per cent from 118.5 pence per share as at 31 December 2022.

 

The share price discount to NAV stood at 43.5 per cent at the end of the period and the negative sentiment towards the real estate sector continues to affect the rating of the shares. The Board believes that the action that has been taken in the refinancing of its debt reduces near term uncertainty and provides flexibility to reduce gearing in the Company and support the dividend increase.

 

The following table provides an analysis of the movement in the NAV per share during the period.

 

 

Pence

NAV per share as at 31 December 2022

118.5

Unrealised decrease in valuation of property portfolio

(1.5)

Movement in interest rate swap

(0.1)

Other net revenue

2.6

Dividends paid

(2.4)

NAV per share as at 30 June 2023 

117.1

       

 

 

Portfolio Performance

 

The Company’s portfolio delivered a total return of 1.5 per cent over the first six months of the year, outperforming the MSCI UK Quarterly Property Index to June 2023 (‘MSCI’) return of 0.3 per cent. Relative outperformance was driven by a capital return of -1.1 per cent against the Index return of -2.0 per cent and an income return of 2.6 per cent against the Index at 2.3 per cent.

In a low-growth environment such as this, income becomes the primary driver of total return.  It is therefore pleasing to report that 40 leasing initiatives and lease events have been concluded over the six-month period, accounting for a contracted income stream of £4.1 million per annum, with a further 19 lease initiatives completing post-period and representing an income stream of £3.8 million per annum.  The Manager highlights in the Managers’ Review the potential for further income reversion in the portfolio. 

The main drag on performance has been the portfolio’s exposure to the office sector, particularly select regional office markets and those buildings on shorter leases. Although the Company decided to reduce its office exposure through the sale of Cassini House in 2021, and while our office assets have generally been backed by positive tenant demand, overall sentiment to this sector of the market cannot be ignored. The Manager is therefore reviewing the portfolio weighting and is actively looking to further reduce the Company’s office exposure.

 

Borrowings

 

The Board has been reviewing financing options available to the Company on its debt, as its £260 million term loan with L&G is due to mature in December 2024. The Company also has a £50 million term loan with Barclays which is fully drawn down, along with an additional undrawn £50 million revolving credit facility (“RCF”) which expires on 31 July 2024 (the term loan and the RCF together being the “Barclays Debt Facility”).

The Board engaged EY Capital & Debt Advisory to act as Independent Financial Advisor in assessing the financing options available.

Following the conclusion of this exercise, we are pleased to announce the signing of a new, initially two-year debt facility provided by incumbent lender, Barclays, and a new lender, HSBC. The new debt facility has been structured with two tranches, being (a) a £60 million RCF and (b) a committed £260 million Term Loan, which can only be drawn to refinance the existing £260 million L&G Loan. Each tranche of the new facility can be repaid at any time. The current Barclays Debt Facility will be repaid, in full, and cancelled on 14 September 2023, with £30 million of the RCF tranche of the new debt facility being drawn down on the same date.

The new debt facility enables the Company to retain the competitively priced L&G Loan which is fixed at 3.32 per cent up to its existing 31 December 2024 maturity, whilst also ensuring the future liquidity needs of the Company are fully funded at an acceptable commitment fee, removing near term refinancing risk. The new debt facility includes two one-year extension options that allow the Company the flexibility to extend it with the agreement of Barclays and HSBC, with the first option available to be requested from 1 February 2024.

The Board believes that the new debt facility represents a successful outcome for the Company as it provides certainty of financing beyond the 2024 continuation vote while retaining the lower-cost fixed rate L&G Loan up to its final maturity date. It avoids having to fix longer-term debt at current rates whilst not precluding any future financing options and/or gearing targets in the light of any future disposals. This new facility therefore provides the Company with greater flexibility and optionality.

 

As at 30 June 2023, the Company’s loan to value, net of cash (‘LTV’) was 23.7 per cent and the weighted average interest rate on the Group’s total current borrowings was 3.6 per cent.

 

Dividends and Dividend Increase

 

The Company paid six interim dividends totalling 2.4 pence per share during the period, being six monthly dividends of 0.4 pence per share. The level of dividend cover for the period was 117.6 per cent on a cash basis. In line with its commitment to keep the level of dividend under review, the Board is pleased to report its intention to increase the level of the monthly dividend by 10.0 per cent to 0.44 pence per share with effect from the October 2023 distribution.

Environmental, Social and Governance (‘ESG’)

 

The Board remains committed to achieving Net Zero Carbon by 2040 or sooner. Detailed analysis and modelling of emissions reduction trajectories, which has been delivered through planned asset level interventions, has been a core feature of ESG activities in this period. The Board and Managers believe that the portfolio is well placed to deliver on its net zero carbon ambition within a business-as-usual context. The Managers and Board continue to pay attention to all material ESG matters.

 

Outlook

Whilst inflationary pressures in the wider economy have begun to ease, the headline rate of inflation remains elevated, and core inflation remains above the consensus forecast. At this point, it is unclear if we will see further increases to the base rate of interest in the short term in what remains an uncertain economic environment for business and consumer confidence.

Long-term interest rates are expected to settle at a higher level than those seen over recent years. This may constrain any prospective recovery in real estate capital values in the near term. It is possible that investment activity will remain subdued as buyers become increasingly selective in the search for attractive long-term returns in a low-growth, high inflation environment. We are also likely to see a greater divergence in sector allocation within real estate and a definitive preference for higher quality assets, or those that can be repositioned to provide increasingly demanded ESG credentials.

Preservation and creation of income continues to be key to performance. The portfolio continues to offer reversionary potential and significant opportunities for proactive management to drive income and related capital growth which will be critical in underpinning performance for the remainder of the year and into 2024, when we hope to see a recovery in the wider property market if the economic environment improves.

 

Paul Marcuse

Chairman

13 September 2023

 

Performance Summary

 

Half year ended 30 June 2023

Half year ended 30 June 2022

% change

 

 

Total Returns for the period *

 

 

 

 

 

Net asset value per share

+0.8%

+11.7%

-10.9%

 

 

Ordinary Share price

-23.0%

+8.3%

-31.3%

 

 

Portfolio

+1.5%

+9.7%

-8.2%

 

 

MSCI UK Quarterly Property Index

+0.3%

+7.8%

-7.5%

 

 

FTSE All-Share Index

+2.6%

-4.6%

+7.2%

 

 

 

 

Half year ended 30 June 2023

Year ended 31 December 2022

 

 

% change

Capital Values

 

 

 

Total assets less current liabilities (£’000)

1,133,223

1,093,103

+3.7%

Net asset value per share

117.1p

118.5p

-1.2%

EPRA Net Tangible Assets per share*

117.1p

118.4p

-1.1%

Ordinary Share price

66.2p

88.5p

-25.2%

FTSE All-Share Index

4,096.3

4,075.1

+0.5%

Ordinary share price discount to net asset value per share*

(43.5)%

(25.3)%

-18.2%

Net Gearing *

23.7%

23.4%

+0.3%

 

 

 

 

Earnings and Dividends

 

 

 

Earnings per Ordinary Share

1.1p

14.4p

 

EPRA Earnings per Ordinary Share

2.6p

TO:  RNS

FROM:  Balanced Commercial Property Trust Limited

L.E.I.:   213800A2B1H4ULF3K397   

DATE:   06 September 2023

 

 

Dividend Declaration

 

 

(Classified Regulated Information, under DTR 6 Annex 1 section 2.3)

 

Balanced Commercial Property Trust Limited today announces a monthly property income distribution payment in respect of the financial year ended 31 December 2023 of 0.4 pence per share as detailed in the schedule below.

 

The key dates for this interim dividend are as follows:

 

Ex-Dividend Date

Record Date

Pay Date

14 September 2023 

15 September 2023 

29 September 2023 

 

All enquiries:

 

The Company Secretary

Northern Trust International Fund Administration Services (Guernsey) Limited Trafalgar Court

Les Banques

St Peter Port Guernsey

GY1 3QL

 

Tel: 01481 745001

Fax: 01481 745051

 

 

To:   RNS

Date:   31 August 2023

LEI Number:  213800A2B1H4ULF3K397                          

From:   Balanced Commercial Property Trust Limited

 

 

Leasing Activity

BCPT secures two key industrial leasing deals

 

 

Balanced Commercial Property Trust PLC (‘BCPT’ or the ‘Company’) announces it has secured two key leasing initiatives in its industrial portfolio, underlining the robust occupational market and demand for high-quality industrial and logistics space:

 

Unit 8, Hams Hall Distribution Park, Birmingham. Hams Hall Distribution Park

Nestle Purina, a leading pet care and food company, has agreed a 10-year lease extension commencing March 2025, with a break at the end of year five. This unit is a key logistics hub within a strategic West Midlands location. The lease shows the tenant’s continued commitment to the building and a rent review in March 2025 is anticipated to show a significant uplift to the current passing rent. The tenant will benefit from a 3.5 month rent free period on commencement of the new lease.

 

Hurricane 52 on the Estuary Business Park, Liverpool

Montirex Ltd, a sportswear clothing brand, has signed a 10-year lease with a break at the end of year five. Hurricane 52 is a newly constructed and highly specified logistics unit of 52,500 sq ft with strong ESG credentials. This letting followed a competitive ‘best bids’ process between three occupiers, and the rent achieved at £8.25psf shows an attractive premium in excess of 7 per cent to the unit’s estimated rental value (ERV).

 

 

Richard Kirby, Fund Manager of BCPT, said: “These latest lettings underscore the demand for industrial and logistics assets in the UK, and it is encouraging to see such a resilient occupier market. Active asset management and the delivery of initiatives such as these are key to converting rental growth into income and capital performance. The portfolio offers a wealth of value-add potential, and we are seeing robust levels of occupational activity on the portfolio at a critical juncture within the market cycle.”

 

 

 

All enquiries to:

 

Richard Kirby

BMO REP Asset Management plc

Tel: 0207 499 2244

 

Innes Urquhart

Winterflood Securities Limited

Tel: 0203 100 0265