REG - Lndn & Stfd Prop plc - Interim Management Statement
20 July 2012
LONDON & STAMFORD PROPERTY PLC
("London & Stamford", "LSP" or the "Group")
INTERIM MANAGEMENT STATEMENT
London & Stamford Property Plc (LSE: LSP.L) today announces its Interim Management Statement for the period from 1 April 2012 to 19 July 2012.
· New £200 million Central London Residential Joint Venture completed with Green Park Investments and the Public Sector Investment Board
· Acquisition by new Joint Venture of 149 apartments at Moore House, London SW1 for £147 million (excl. costs)
· Acquisition of two office buildings at Leatherhead and Marlow in the South East for £111.3 million (excl. costs), producing a cash on cash yield of 11.2%
· Completion of the disposal of the Triangle Distribution Portfolio for £265 million
· Projected future firepower in excess of £600 million
Patrick Vaughan, Chief Executive of London & Stamford, said:
"I am very pleased to confirm that c.£260 million of the investments to which the Chairman referred in his year end announcement on 30 May 2012 has already been exchanged and or completed. Indeed, today I can confirm that we have completed on the acquisition of Moore House, London, SW1, for our Central London Residential Joint Venture, for £147 million. LSP's share is 40%.
This is exciting news for LSP, providing evidence that notwithstanding the care and caution which we apply to our investment approach in difficult and uncertain economic times, we have identified investment opportunities which deliver exceptionally good cash on cash returns. Furthermore we have acquired assets where the prospects for creating value from asset management activity are good.
Given the troubled banking market and a difficult economy, we continue to believe that more opportunities may be forthcoming to those with firepower and that acquisitions of good quality assets with returns well above the cost of capital will be possible.
We confirm that we are progressing, alongside our partner, Green Park Investments, the sale of our joint interest in the Meadowhall Shopping Centre.
Meanwhile, the Centre continues to perform well. Footfall for the year to 30 June 2012 is showing a small increase (0.4%) and sales in the year to date are also slightly ahead (0.1%). In such difficult economic conditions, retailers are very satisfied with the performance of their Meadowhall stores and there have been no administrations since we last reported in May 2012.
Since that report, new leases have been completed with Lego, Foot Asylum and Carluccio's and five further leases are in solicitors hands. The outcome of the initial planning application for the development lands surrounding Meadowhall is awaited and we are optimistic that a successful Next Home and Garden concept store development will be forthcoming.
As previously reported, the disposal of the Triangle portfolio of 17 distribution units for £265 million was completed during the period to an entity managed by a Blackstone Real Estate Fund. The disposal generated a return on equity of c.33% and net cash after the repayment of debt of £94 million.
The portfolio now comprises three wholly-owned warehouses at Wellingborough, Tamworth and Nottingham, in which our equity investment at the year end was £45.4 million, and a 50% share of a Distribution Joint Venture with Green Park comprising 11 warehouses with an equity value to LSP of £47.8 million.
We can confirm that we are making progress with re-letting our unit at Tamworth, and we are hopeful that a new tenant will be in place before the end of September.
The rest of the combined portfolio, except for Tamworth, remains fully let with various rent reviews and asset management initiatives ongoing.
Since the disposal of Triangle, the geographic distribution of the portfolio has become more heavily focused towards London and the South East.
The office portfolio, including Marlow International where contracts were exchanged on 3 July, now comprises four buildings; two in the City of London and two located in the South East, adjacent to the M25, West of London, with a combined value in excess of £300 million.
The post year end acquisitions of Marlow International and Unilever House, Leatherhead, are attractive investments which offer a cash on cash yield in excess of 11.2% (once leverage is applied on a cross collateralised basis) and a good blend of quality income from good tenants and asset management opportunities. We are pleased to report that we have received full credit approval for a £61.7 million bank facility which we hope to complete shortly.
In respect of One Carter Lane in the City of London; as expected, the lease will be terminated by Goldman Sachs for effect on 18 March 2013 and we are progressing a detailed design for its refurbishment. We aim to commence immediately on vacant possession with a view to completion by the end of 2013.
There is nothing further to report on One Fleet Place in the City of London, which remains fully let to SNR Denton LLP at £36 psf. The next rent review is due in September 2013.
The completion of Moore House brings the total value of LSP's interest in the Central London Residential market to c.£188 million which comprises 415 apartments and includes our interest at Seward Street which is currently under construction and due for completion later this year.
The letting process for Moore House will commence immediately through our joint agents (Knight Frank and Savills) and the remaining 266 apartments in our portfolio continue to attract a 97% occupancy.
It is our intention, in future, to focus our residential activity through the new Joint Venture and accordingly we are examining the potential divestment of our interests at Highbury, The Oval, Battersea and Seward Street.
No valuation has been undertaken since our Results for the year ended 31 March 2012 which were published on 30 May 2012.
As at 30 June 2012, our cash resources amounted to £135 million. Since then, we have completed or contracted for the acquisitions of Leatherhead, Marlow and Moore House. Net of debt which we expect to raise in respect of these acquisitions (LSPs share), the further cash commitment will be £24 million, which will reduce our cash to £111 million.
For further information contact:
London & Stamford Property Plc
Tel: +44 (0)20 7484 9000
Kreab Gavin Anderson
Tel: +44 (0)20 7074 1800
Notes to editors:
London & Stamford Property Plc was set up to exploit opportunities that it anticipated in the UK property cycle and is a group UK-REIT. The Company has a highly experienced management team and invests in and actively manages commercial property, including office, retail and distribution real estate assets, all of which are located in the UK, and residential assets in Central London.
The Company is traded on the London Stock Exchange's Main Market (LSP.L) and is authorised by the FSA to carry out certain regulated activities.
Further information on the Company is available from the Company's website: www.londonandstamford.com
This document includes statements that are forward-looking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of London & Stamford Property Plc to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Any such forward-looking statements speak only as of the date of this document and London & Stamford Property Plc does not undertake to update forward-looking statements to reflect events or circumstances after that date. Information contained in this document relating to the group should not be relied upon as an indicator of future performance.
This information is provided by RNS