F&C ASSET MANAGEMENT PRESS RELEASE
- Ian McBryde to retire in 2016 after 10 years as fund manager
- Peter Lowe appointed as successor
Peter Lowe will become lead fund manager of the Company with effect from the end of 2015 to ensure a smooth handover of responsibilities. Peter will join BMO Real Estate Partners, the Company's investment manager, from DTZ Investors where he has worked for the last nine years as fund manager on a number of mandates including Pearl Assurance, University Superannuation Fund and Imperial Tobacco Pension Fund.
'I would like to express our thanks to Ian for the contribution he has made to the Company over the last 10 years and wish him well in his forthcoming retirement. Your Board is confident that Peter, supported by the wider investment team within BMO Real Estate Partners, will build on Ian's achievements and continue to deliver long-term performance for you as shareholders.'
The market capitalisation of the Company has increased from £194 million (as at 30 June 2014) to
£233 million (as at 30 June 2015). The Company's net asset value ('NAV') total return for the year was 22.7 per cent and the share price total return was 24.9 per cent. The shares were trading at a premium to NAV of 2.6 per cent at the year end.
Over the year to 30 June 2015, the Company's property portfolio witnessed strong performance with ungeared return of 16.7 per cent, outperforming the Investment Property Databank ('IPD') UK Quarterly Index return of 15.7 per cent. The main driver of this strong return was capital growth of 10.5%.
Industrial and distribution properties produced the highest returns for the portfolio at 22.8 per cent. Offices, boosted by holdings in the South East returned 16.5 per cent. The Company's retail warehouse portfolio performed extremely well returning 16.3 per cent compared with the IPD sub sector benchmark of 10.3 per cent.
A number of specific assets were responsible for boosting returns, not only as a result of a strengthening investment and occupational market, but also due to asset management and successful lettings. The largest contribution to returns came from Units 1-2 Network, Eastern Road, Bracknell, which produced a total return of 30.8 per cent following the re-letting of one of the
units on a ten year term, without break, at a new rental level of £367,300 per annum, which equates to £10.50 per square foot, some 19 per cent higher than the previous passing rent.
The Company acquired two office investments for a total of £10.25 million over the last year. This included the acquisition of a modern business park office building in High Wycombe for £7 million which has returned 19 per cent since purchase in July 2014, principally as a result of increased capital value due to inward yield movement. As part of the strategy of disposing of small non-core holdings, the Manager sold four properties for £5.7 million.
Three interim dividends of 1.25 pence per share were paid during the year, with a fourth interim dividend of 1.25 per cent to be paid on 30 September 2015. This gives a total dividend for the year ended 30 June 2015 of 5.0 pence per share, a yield of 5.0 per cent on the year end share price. In the absence of unforeseen circumstances, it is the intention to continue to pay quarterly interim dividends at this rate. Following the Company's adoption of UK REIT status, effective from 1 January 2015, the third interim dividend was paid as a property income distribution, rather than as an ordinary dividend and it is expected that the majority of future dividends will be paid in this way.
'If the economy performs in line with consensus forecasts, we believe that property will continue to deliver positive total returns. There are global uncertainties and the scope for further yield compression may be limited. However, performance is likely to become more reliant on rental growth spreading to the regions, and the income return which property has traditionally delivered. We continue to believe in the importance of sound stock selection and that the protection and enhancement of the income stream will remain key to performance.'
The net gearing level as at 30 June 2015 was 29.7 per cent. The Board has been considering a refinancing of the existing loan facility with Lloyds Bank plc, which is due for repayment in January 2017, and has entered into heads of terms with Canada Life Investments and Barclays Bank plc for new debt facilities of up to £110 million, under a proposed £90 million 11 year term loan with Canada Life Investments, and a £20 million 5 year revolving credit facility with Barclays. Based on UK Gilt rates as at the current date, and assuming the new facilities are drawn down in full, it is estimated that the total interest rate payable under the new facilities would be approximately 3.3 per cent per annum. This is significantly lower than the existing cost of debt which is approximately
per cent per annum. On the basis that all conditions are met with both parties, the Board intends to complete the refinancing transaction prior to 31 October 2015.
Highlights of F&C UK Real Estate Investments Limited annual results, for the year to 30 June 2015, include:Share price total return of 24.9 per cent
Portfolio ungeared return of 16.7 per cent
Net asset value per share total return of 22.7 per cent
Net asset value per share total return since launch* of 117.5 per cent
Dividend of 5 pence per share for the year
About F&C UK Real Estate Investments Limited:The Company's investment objective is to provide ordinary shareholders with an attractive level of income together with the potential for capital and income growth from investing in a diversified UK commercial property portfolio
The Company was previously named IRP Property Investments Limited. On April 11 2013, enlarged by the acquisition of the ISIS Property Trust, the Trust was renamed F&C UK Real Estate Investments Limited
F&C UK Real Estate Investments Limited is managed by Ian McBryde at BMO Real Estate Partners in London
The Company is benchmarked against the Investment Property Databank ('IPD') Quarterly UK Index
The full results statement is attached. For more information, please call the BMO Global Asset Management press office on +44 (0) 20 3727 1888 or email bmo@fticonsulting.com
*Launch date: 1 June 2004
BMO Global Asset Management is a global investment manager delivering service excellence from
24 offices in 14 countries to clients across five continents. Including discretionary and nondiscretionary assets, BMO Global Asset Management had more than US$244 billion in assets under management, as of July 31, 2015.
Our four major investment centres in Toronto, Chicago, London and Hong Kong are complemented by a network of world-class boutique managers strategically located across the globe: BMO Real Estate Partners, LGM Investments, Monegy, Inc., Pyrford International Ltd., and Taplin, Canida & Habacht, LLC.
With operations throughout North America and Europe, and in Abu Dhabi, Mumbai, Beijing, Shanghai, Hong Kong, Melbourne and Sydney, BMO Global Asset Management has been recognized by Pension & Investments as one of the world's largest 100 asset managers based on combined assets under management as of December 31, 2013 and is a signatory of the United Nations-supported Principles for Responsible Investment initiative (UNPRI).
BMO Global Asset Management is a part of BMO Financial Group (NYSE: BMO), a fully diversified financial services organization with C$672 billion as of July 31, 2015, and more than 47,000 employees.
|
distributed by
|
