TIDMCRC
RNS Number : 1812Z
Circle Property PLC
16 May 2019
16 May 2019
Circle Property Plc
("Circle" or the "Company")
VALUATION AND TRADING UPDATE
Circle Property Plc, a specialist regional UK office investment,
development and management company, provides the following update
on trading ahead of its preliminary results for the 12 months ended
31 March 2019, which it intends to announce in June 2019.
Valuation growth from active management continues
-- Circle's continued focus on the active management of its
portfolio of well located office assets in regional cities
delivered another year of market leading NAV growth, by which
measure Circle is the best performing listed UK real estate company
over the last three years(1) .
-- As at 31 March 2019, the portfolio was independently valued
at GBP124.6 million, up 9.23% since 31 March 2018 (GBP114.1
million).
-- An unaudited NAV of GBP78.4 million (GBP2.77 per share), up
20.43% since 31 March 2018 (GBP2.30 per share) and up 95% since IPO
in February 2016.
Strategic disposal of non-core assets increases focus on
offices
-- Circle disposed of GBP9.5 million of non-core, retail and
roadside assets above book value including:
o A petrol filling station close to Stonehenge on the A303 for
GBP3.5 million (October 2018); and
o Two high street retail assets in Week Street, Maidstone, for
GBP1.4 million in aggregate (October 2018)
o The Company also sold Baildon Bridge Retail Park, Shipley,
near Bradford, in April 2019 post year end, for GBP4.6 million in
line with the most recent valuation, removing its last exposure to
the challenged retail market.
-- The proceeds of these sales will be recycled into the
Company's refurbishment and redevelopment pipeline as well as
future investment opportunities.
-- The portfolio now comprises 21 regional office buildings with
reversionary potential and added value opportunity from active
management, and an industrial property near Ipswich.
Lettings activity grows income
-- Over the year, Circle agreed 12 new lettings across the
investment and development portfolio, comprising a total of 78,000
sq ft at an aggregate contracted annual rent of over GBP1.35
million.
-- Post year end, the Company let the entire first floor,
comprising 20,000 sq ft, of K2 office building at Kents Hill Park,
Milton Keynes, to Grand Union Housing Group, achieving full
occupancy at the business park. The headline rent of GBP340,000
equates to GBP17.50 per sq ft and set a new benchmark rent at Kents
Hill Park. Circle will now commence on the refurbishment of the
third building, K3, on the 22 acre business park, which will be
offered either as a single let 12,000 ft building or up to four
suites of approx. 3,000 sq ft each.
Refinancing provides firepower for investment opportunities
-- The Company completed an agreement with RBS and HSBC for a
GBP100 million new financing facility. The facility replaces a
GBP55 million facility with RBS agreed in June 2016 and amended in
March 2018. The new facility comprises a senior revolving facility
agreement for GBP60 million, with an "accordion" option to extend
the facility by a further GBP40 million. The facility has a
four-year term, with the option of a further two-year extension, at
an interest rate of 2.05% over LIBOR.
John Arnold, CEO of Circle Property Plc, commented: "This is our
third successive year of delivering total return in excess of 20%
for investors and is a direct result of our proven strategy and
active management approach. Following the significant refinancing
and the strategic disposals completed over the course of the year,
our balance sheet is stronger than ever with all the essential
building blocks now in place for Circle's next phase of growth.
"We continue to have confidence in capturing the reversionary
opportunity in the portfolio and assessing value accretive
acquisition opportunities as and when they arise."
(1) Source: Radnor Capital research, 31 March 2019
This announcement is inside information for the purposes of
Article 7 of EU Regulation 596/2014.
ENDS
Circle Property Plc +44 (0)20 7930 8503
John Arnold, CEO
Edward Olins, COO
+44 (0) 207 397
Cenkos Securities 8900
Azhic Basirov
Katy Birkin
Radnor Capital
Iain Daly +44 (0) 20 3897
Joshua Cryer 1830
FTI Consulting +44 (0)20 3727 1000
Richard Sunderland
Eve Kirmatzis
circleproperty@fticonsulting.com
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END
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