REG - Mailbox REIT PLC - TRADING UPDATE ALONGSIDE DIVIDEND DECLARATION

FTI ConsultingAnnouncement

28/04/2022 10:45

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RNS Number : 6965J  Mailbox REIT PLC  28 April 2022

28 April 2022

Mailbox REIT Plc

("Mailbox REIT" or the "Company")

TRADING UPDATE ALONGSIDE DIVIDEND DECLARATION SHOWS NEW LETTINGS, STRONG
INCOME AND IMPROVED VALUATION

 

Mailbox REIT Plc (IPSX ticker: MBOX), the owner of the Mailbox, a prime
regional office-led, mixed-use asset offering long-term secure income and the
potential for value enhancement, provides a trading update and declares an
interim dividend for Q1 2022 which is in line with the Company's IPO target.

 

Stephen Barter, Non-Executive Chairman of Mailbox REIT plc, commented:

"Following a strong first year as a public company, Mailbox started the new
financial year with a positive first quarter, recording further valuation
increases, high rent collection, continued implementation of our ESG
initiatives and positive leasing activity.  Furthermore, the conversion of
50,000 sq ft of retail space to higher value office accommodation on level one
is due to open next month, providing Birmingham with a brand-new flexible
workspace operated under IWG's Spaces brand, of which around a fifth has
already been reserved.  Building on the momentum achieved in signing the new
office and F&B leases we announced in January, we have also now agreed a
lease for with Impress Dental, who will open a dental clinic on level two,
further enhancing the range of amenities on offer and cementing Mailbox's
position as a live, work play destination."

Strong Rent Collection throughout 2021 continues into 2022

As of 22 April 2022, Mailbox REIT had collected 93.7% of the contractual rents
for the quarter commencing 25 March 2022, with 99.6% now received for the
quarter commencing 25 December 2021. Management expects the March 2022 rent
collections to finish in line with December 2021 at c. 99.0%.

 

Rent collection for the March 2022 quarter day by sector is as follows:

 

 Sector    % Collected  % of total rent
 Office    98.0%        46.1%
 Car Park  100.0%       21.4%
 Retail    82.2%        11.1%
 F&B       81.3%        17.9%
 Other     100.0%       3.5%
 Total     93.7%        100.0%

 

 

As at 22 April 2022, the Group has collected 96.8% of rent due for the
December 2021 and March 2022 quarter days.

 

Dividend declaration in line with 7% target dividend yield

The Mailbox REIT board has declared an interim dividend of 1.75 pence per
share for Q1 2022. Combined with the Q4 2021, Q3 2021 and Q2 2021 dividends
this is in line with the target of over 7p per share per annum, as set out in
the Company's Admission document (equating to 7% based on an issue price of
100p). The dividend will be paid on or around 27 May 2022. The ex-dividend
date will be 5 May 2022 and the record date will be 6 May 2022.

 

Fourth consecutive quarter of valuation increases

The Mailbox valuation improved for the fourth consecutive quarter since IPO
rising to £188.5 million as at 31 March 2022, reflecting a 1.4% improvement
since 31 December 2021 (£185.8 million).  The independent fair valuation of
the Mailbox was undertaken by Avison Young and reflects the ongoing capital
expenditure taking place as part of the level 1 retail to office conversion.

 

At 31 March 2022, the true equivalent yield of the Mailbox was 6.24% (31
December 2021: 6.22%).

 

Net Asset Value

At 31 March 2022, the Company's consolidated unaudited net asset value ("NAV")
was £84.65 million, equivalent to 99.77 pence per share, when account is
taken of the interim dividend paid on 25 February 2022, compared to £85.95
million and 101.30 pence per share as at 31 December 2021.

 

The NAV attributable to the ordinary shares has been calculated under
International Financial Reporting Standards as adopted by the United Kingdom
and incorporates both the Group's property on a 'Red Book' valuation basis as
at 31 March 2022 and net income for the quarter, but does not include a
provision for the interim dividend declared today (see above) for the quarter
ended 31 March 2022.

 

Long and Secure Income

The Mailbox REIT remains fully invested in the Mailbox, a prime regional
office-led, mixed-use asset, which is currently 95.4% occupied (inclusive of
Spaces management agreement) with a weighted average unexpired lease term of
13.1 years to the earlier of break or expiry and 13.7 years to expiry.

 

According to Creditsafe's rating checks for the quarter, 76% of the asset's
gross income stream is considered to be of very low risk, with a further 9%
considered low risk. Only 6% of the asset income, relating to certain retail
and F&B elements, is considered to be of high or very high risk.

 

Asset Management and Leasing Update

 

Q1 2022 saw further leasing activity with over 20,000 sq ft of news leases now
signed since IPO, bringing Mailbox's occupancy to over 95%.  In addition to
the office and F&B lettings we previously announced, the Mailbox was able
to secure a letting to Impress Dental on level 2. The provision of this new
dental clinic aligns with the strategy of repositioning the scheme as a "Live
Work Play" destination, by providing complementary retail, service and leisure
offerings to the office space. This letting should also begin attracting
similar uses to the scheme, further reinforcing the assets credentials in this
respect.

 

M7 Real Estate, the Asset Manager, continues to work with IWG to transform
former retail space into a state-of-the-art co-working space that is due to
open its doors next month.  22% of the space has already been pre-let, with
this type of flexible office space typically not gaining leasing momentum
until the finished product is available for occupation.

 

The 50,000 sqft space will be operated under IWG's Spaces brand and will
provide a full range of workspace options, offering solutions for businesses
of all sizes, who are seeking stylish open, collaborative or private working
spaces.

 

Spaces at The Mailbox will also support over 350 OpenDesk workspaces, making
it the largest OpenDesk hub in IWG's global portfolio. OpenDesk offers maximum
flexibility and greater privacy than traditional co-working, using magnetic
screens to create privacy or clusters for larger teams or for meetings.  Each
workspace can be accessed using Spaces' mobile app, providing 24/7 working for
members.

 

OpenDesk was created in direct response to the growing demand for flexible
workspace, which was further accelerated by the COVID-19 pandemic and follows
IWG's commitment to locate world-class flexible workspace facilities at
employees' doorsteps and close to public transport, reducing their commutes
and supporting hybrid working.

 

Birmingham is one of the UK's fastest growing regional centres and is home to
over 100,000 companies. Demand for flexible workspace is swelling nationally
as employers and employees navigate their way out of the pandemic, with hybrid
working being at the forefront of their work strategies, and this is filtering
through to excellent demand at Mailbox with 22% of the space already
pre-committed.

 

 

 

ENQUIRIES

 Mailbox REIT PLC
 Stephen Barter - Chairman                         via FTI Consulting below

 M7 Real Estate Ltd                                +44 (0) 20 3657 5500

 Richard Croft

 WH Ireland (Lead Advisor & Corporate Broker)      +44 (0) 20 7398 1145
 Chris Hardie

 FTI Consulting (Communications Adviser)           +44 (0) 20 3727 1000
 Richard Sunderland                                MailboxREIT@FTIConsulting.com

 Claire Turvey

 Eve Kirmatzis

 Alter Domus (UK) Limited                          +44 (0) 207 645 4800

 (Company Secretary)

 

The Company's ISIN is GB00BM9BWM32.

 

Further information on Mailbox REIT plc is available at
www.themailboxreit.com(1).

 

NOTES

Mailbox REIT PLC The Mailbox REIT is a single asset REIT offering shareholders
exposure to the performance of the Mailbox which is a prime regional
office-led, mixed-use asset offering long-term secure income and the potential
for value enhancement.

 

The Company's asset manager is M7 Real Estate Limited ("M7"). M7 is a leading
specialist in the pan-European, regional, multi-tenanted real estate market.
It has over 220 employees in 15 countries across Europe. The team manages over
570 properties with a value of circa €4.9 billion.

1    Neither the content of the Company's website, nor the content on any
website accessible from hyperlinks on its website or any other website, is
incorporated into, or forms part of, this announcement nor, unless previously
published on a Regulatory Information Service, should any such content be
relied upon in reaching a decision as to whether or not to acquire, continue
to hold, or dispose of, securities in the Company.

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