Following the announcement of the Net Asset Value as at 31 December 2008 made on 28 January 2009, the Invista Foundation Property Trust Limited ('the Company') has exchanged contracts to sell two properties and also made further progress on income enhancing asset management initiatives.
Disposals
The Company has exchanged contracts to dispose of National Magazine House, London W1, an office and residential building mainly let for a further nine and a half years to National Magazine Company Limited. The price agreed is £31.4 million (approx. 31.12 mln.) with the potential for up to an additional £2 million linked to the outcome of the outstanding rent review dated 28 September 2008. The price including overage reflects a 6.4% discount to the independent valuation as at 31 December 2008 of £35.7 million.
The Company has also exchanged contracts to dispose of a retail and office property let to Royal Bank of Scotland in Brighton for a further 12.5 years. The sale price of £3.5 million reflects a net initial yield of 5.7% and a premium of 25% above the 31 December 2008 valuation of £2.8 million.
Following completion of these disposals the Company will have sold £107 million of assets since the announcement of its Strategic Review in July 2008.
Asset management
The Company's biggest potential vacancy during 2008 and 2009 was the British Broadcasting Corporation ('BBC') at Reynards Business Park, Brentford, an industrial estate in West London. During February 2009 lease agreements have been completed producing an annual rent of £702,000 for a further four years, with a tenant only break option after two and a half years. The new rental level reflects an uplift of £55,000 per annum or 9% compared to the previous rent and provides the Company with time to consider alternative, higher value uses at the site.
The Company continues to achieve rental uplifts in excess of the assumed independent valuation levels. At The Galaxy in Luton, a rent review has been settled with Cineworld increasing the annual rent to £452,000 from £321,000, an uplift of 41%.
Portfolio impact
Following the disposals and based on the independent valuation as at 13 December 2008, the Company will have a property portfolio valued at £332.4 million comprising 62 assets with an average lot size of £5.36 million.
Following the disposals and asset management activity the portfolio rent is £24.9 million per annum reflecting a net initial yield of 7.0%, after allowing for normal purchase costs of 5.75%.
Following the expiry of contractual rent free periods during 2009 this will rise to £26.5 million and a net initial yield of 7.4%. The net reversionary yield for the portfolio is 8.4%.
Finance
Following completion of the disposals and before any overage at National Magazine House the Company will have £81.7 million of cash and a loan to value ratio of approximately 40% with cash netted of debt, based on the portfolio valuation as at 31 December 2008.
Source: FD
