REG - Helical PLC - Trading Update

HelicalAnnouncement

06/04/2023 07:00

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RNS Number : 5433V  Helical PLC  06 April 2023

 

6 April 2023

HELICAL PLC

("Helical" or the "Company")

Trading Update for the Period Since 1 October 2022

 

Helical today provides an update covering its trading activity for the period
1 October 2022 to 5 April 2023 ("the Period") in advance of the publication of
its Full Year results which will be announced on Tuesday 23 May 2023.

 

Commenting on the Company's activities, Gerald Kaye, Chief Executive, said:

 

"The recent announcement that Transport for London ("TfL") has selected
Helical as its preferred partner for an initial three over-station
developments will boost the Company's development pipeline to almost 790,000
sq ft (Helical share 460,000 sq ft) across four substantial office schemes,
subject to formalisation of the joint venture agreement. With 100 New Bridge
Street, EC4 due to start later this year and these three TfL schemes spread
over the period from 2024 to 2026, this pipeline, our most significant for a
number of years, is scheduled to deliver best-in-class office space into an
undersupplied market each year from 2025 to 2028.

 

"Demand from occupiers for well located, highly sustainable offices with good
amenities, which are essential in attracting and retaining the top talent, is
enabling landlords with the best buildings to command premium rents.  There
remains a shortage of best-in-class newly refurbished or redeveloped office
buildings in central London, a dynamic that is likely to persist for the rest
of this decade as the market plays catch up. With an experienced management
team, a substantial development pipeline, no legacy assets and historically
low gearing levels, Helical is well positioned to capitalise on the ongoing
market dislocation and structural trends impacting the office sector."

 

Operational Performance

 

Pipeline

 

·   At 100 New Bridge Street, a resolution to grant planning permission
has been received from the City of London and the final decision notice will
be issued upon completion of the Section 106 Agreement. The carbon friendly
new building, to be completed in spring 2025, will provide 192,000 sq ft of
office space across 10 storeys, including three new floors which will benefit
from exceptional views of St. Paul's Cathedral. Construction work is
anticipated to commence in Q4 2023 once current office tenant Baker McKenzie
vacates the building.

·   In February 2023, Helical was selected by TfL's wholly owned
commercial property company, TTL Properties Limited, as the preferred
investment partner for its commercial office portfolio joint venture.
Contracts are expected to be concluded in the near future to formalise the
joint venture, which will create well‐connected, sustainable and inclusive
workspaces across central London. Initially, it will be seeded with three
over‐station development ("OSD") sites, namely:

o Bank OSD - located above the recently opened Bank station entrance on Cannon
Street. This eight storey office development will deliver 142,000 sq ft NIA
and is scheduled to start on site in 2024.

o Southwark OSD - located above Southwark Tube station. The scheme has consent
for a 220,000 sq ft NIA hybrid timber office building over 17 storeys. The
development is expected to start on site in 2025.

o Paddington OSD - located on the Grand Union Canal, close to the Elizabeth
Line station at Paddington. This 19-storey building will provide 235,000 sq ft
NIA of office space and construction is expected to commence in 2026.

 

 

Lettings

 

·   In the Period we have completed five new lettings totalling 45,908 sq
ft NIA, delivering contracted rent of £4.1m (our share £2.2m) at a 10.3%
premium to 31 March 2022 ERVs. Lettings include:

o The sixth and seventh floors at The JJ Mack Building, EC1 to Partners Group,
a leading global private markets firm. The 37,880 sq ft NIA letting, at an
average rent of £99.90 psf, represents an 11.7% premium to 31 March 2022
ERVs.

o A further 3,504 sq ft NIA letting at The Loom, E1 at a rent of £55.00 psf
which is in line with the 31 March 2022 ERV.

o The letting of three retail units comprising 4,524 sq ft at Barts Square,
EC1. Following these lettings to LAP Bikes, MyLuthier and Little Farm/Athletic
Fitness, only one retail unit remains available across the Barts Square
estate.

Sales

 

·    At Barts Square, we have completed the sale of a further eight
residential apartments during the Period. A contract for the sale of the last
remaining apartment in this 236-unit residential scheme has exchanged and is
due to complete later this month.

 

Rent Collection

 

·   As at 5 April 2023, we had collected 97.6% of the March quarter rent
(7 April 2022: 93.4%) and expect to collect a further 1.2% via agreed payment
plans.

·    We have now collected 98.5% of all rent contracted and payable for
the financial year to 31 March 2023. Of the balance, 1.0% remains to be
collected via payment plans with the remaining 0.5% subject to ongoing
discussions.

 

Financing

 

£400m Revolving Credit Facility ("RCF")

 

At 31 March 2023, the Group had drawn £230m under its RCF with an effective
interest rate of 3.1% and a maturity of 3.3 years. The RCF benefits from
interest rate swaps at an average of 0.9% plus margin on 100% of the drawn
amount for the remaining term of the facility to July 2026.

 

The RCF is a Sustainability Linked Loan and includes three ESG targets, which,
if met, would result in a small reduction in the margin. We are due to report
on our performance against these targets in our 2023 Annual Report and
Accounts.

 

Other Facilities

 

In our joint ventures, we had drawn £60.4m of the £69.9m (our share)
facility with Allianz to develop The JJ Mack Building, EC1. Following
practical completion of the development on 30 September 2022, the effective
interest rate on the loan is 4.2%, including commitment fees on the undrawn
amount, reducing to 2.25% when fully let.

 

At 31 March 2023, the Group had c.£58m of cash and £190m of undrawn loan
facilities with an overall weighted average cost of debt of 3.4% and an
average maturity of 2.9 years.

 

Sustainability

 

Our commitment to sustainability continues to receive external recognition and
in December 2022 we achieved a B rating from the global disclosure system CDP,
an improvement from our previous rating of C. We also retained our EPRA
Sustainability Best Practices Recommendations (sBPR) Gold Award and our GRESB
5 Star, reflecting our comprehensive and transparent sustainability reporting.

 

Notice of Results

 

The Group confirms that it will announce its full year results for the 12
months ended 31 March 2023 on Tuesday 23 May 2023. There will be a
presentation for analysts on the morning of the results at The JJ Mack
Building, 33 Charterhouse Street, London EC1M 6HA. For further details, please
contact FTI Consulting.

 

For further information, please contact:

 

 Helical plc
 Gerald Kaye (CEO)  Address: 5 Hanover Square, London W1S 1HQ
 Tim Murphy (CFO)   Website: www.helical.co.uk (http://www.helical.co.uk)

                    Tel: 020 7629 0113

 FTI Consulting
 Dido Laurimore     Tel: 020 3727 1000

 Richard Gotla

 Andrew Davis

Schelical@fticonsulting.com (mailto:Schelical@fticonsulting.com)

 

 

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