REG - Mailbox REIT PLC - Trading Update

FTI ConsultingAnnouncement

27/01/2022 08:05

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RNS Number : 7737Z  Mailbox REIT PLC  27 January 2022

 

27 January 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 (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 Q4 2021 which is in line with the Company's IPO target.

 

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

"The final quarter of 2021 saw Mailbox REIT deliver another positive
performance, rounding off what was a strong first year as a public company.
Our main asset management initiative which will see the conversion of 50,000
sq ft of retail space to higher value office accommodation is due to open in
Q2'2022, providing Birmingham with a brand-new flexible workspace operated
under IWG's Spaces brand.  In addition, we have secured new office and
F&B leases adding further tenants to our roster of low-risk occupiers,
while also maintaining strong rent collection figures. All this activity
supports our ability to continue paying a dividend in line with our 7 pence
per share IPO target, as announced today.

 

"Working with M7, the board has also made the Company's focus on ESG an
important priority and our approach to being a responsible landlord, including
setting out the Mailbox's path to net zero, will be addressed in detail in the
full annual report, alongside our other community and environmental
credentials.  We recognise that this has an important role not just in
helping create a better and greener future for generations to come but is also
vital to Mailbox's ability to attracting tenants and growing income."

 

Strong Rent Collection throughout 2021 continues into 2022

As of 17 January 2022, Mailbox REIT had collected 93.9% of the contractual
rents for the quarter commencing 25 December 2021. Of the remaining 6.1% due
during the quarter, 5.7% is expected to be collected through monthly payments,
with the remaining 0.3% under discussions, bringing the total collection to
just over 99%.

 

Rent collection for the December 2021 quarter day by sector is as follows:

 

 Sector    % Collected  % of total rent
 Office    100.0%       47.2%
 Car Park  100.0%       21.6%
 Retail    83.9%        11.1%
 F&B       74.4%        16.7%
 Other     99.0%        3.5%
 Total     93.9%        100.0%

 

The Company has now collected 99.2% of total contractual rent demands for the
September 2021 quarter day and expects to match these collection levels for
the December 2021 quarter day.

 

Since the beginning of 2021, the Group has collected 97.7% of rent due, with
the office and car parking tenants continuing to pay 100% of their rent
demands.

 

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 Q4 2021. Combined with the 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, which will be a Property Income Distribution, will be paid on 25
February 2022. The ex-dividend date will be 3 February 2022 and the record
date will be 4 February 2022.

 

Third consecutive quarter of valuation growth

The Mailbox valuation improved for the third consecutive quarter since IPO
rising to £185,825,000 as at 31 December 2021, reflecting a 1% improvement
since 30 September 2021 (£184.0 million) and an increase of 2.6% since 31
December 2020 (£181.1 million).  The independent fair valuation of the
Mailbox was undertaken by Avison Young.

 

At 31 December 2021, the true equivalent yield of the Mailbox was 6.22% (30
September 2021: 6.43%).

 

Net Asset Value

At 31 December 2021, the Company's consolidated unaudited net asset value
("NAV") was £85.95 million, equivalent to 101.30 pence per share, when
account is taken of the interim dividend paid on 26 November 2021, compared to
£86.47 million and 101.91 pence per share as at 30 September 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 December 2021 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 December 2021.

 

Share Price

Despite relatively high volatility in the UK and world equity markets, the
Mailbox share price has continued to rise gradually, broadly in line with NAV
per share.  The shares have always remained above the issue price and are
currently trading at a small premium to NAV.

 

Long and Secure Income

The Mailbox REIT remains fully invested in the Mailbox, a prime regional
office-led, mixed-use asset, which is currently 95.2% occupied (inclusive of
Spaces management agreement) with a weighted average unexpired lease term of
13.5 years to the earlier of break or expiry and 13.11 years to expiry.

 

According to Creditsafe's rating checks for the quarter, 78% of the asset's
gross income stream is considered to be of very low risk, with a further 9%
considered low risk. Only 5% of the asset income, relating to certain retail
and F&B elements, is considered to be of high or very high risk.

 

Asset Management Update:  Level 1 Retail to Office Redevelopment

 

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 in Q2 2022.

 

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 15% of the space already
pre-committed.

 

Q4 2021 saw further leasing activity with the completion of 15,000 sqft of
leases on vacant space, further reducing Mailbox's current overall vacancy to
sub 5%.  This included signing a new lease with Castle Fine Art, which
already operates a gallery in the retail space and has taken 8,000 sqft of
office space to house its national headquarters, as well as Sixes cricket
club, which will open its doors as the latest addition to the F&B offering
in January 2022. These leasing deals will add a further £400,000 of income
upon expiry of rent-free periods.

 

 

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

 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 €4.3 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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