REG - Value & Index Prop - Acquisition and Year End Portfolio Valuation

Value and Indexed Property Income TrustAnnouncement

14/04/2023 07:00

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RNS Number : 1684W  Value and Indexed Prop Inc Tst PLC  14 April 2023

 

Value and Indexed Property Income Trust PLC ("VIP")

 

£7.8 million Acquisition and Year End Portfolio Valuation

 

Value and Indexed Property Income Trust PLC ("VIP") announces the acquisition
of a freehold leisure investment at Coventry Crosspoint Business Park for
£7.8 million at a net initial yield of 7.4%. Rental income totals £0.6
million, 77% to Tenpin Limited (bowling) on a lease without break until 2050,
with RPI-linked rent increases capped at 4% and collared at 2% p.a. The two
small restaurant units are let to Starbucks on an RPI-linked lease and Pizza
Hut on a fixed increase lease with 11 and 9 years to run, respectively.

 

This acquisition completes VIP's transition to a fully invested property
investment trust (99.5% of total assets), with its dividend now fully covered
by contracted rental income. The portfolio contains no voids and no offices
29% of the portfolio is in industrial/warehouse property, 29% in supermarkets
and 42% is in alternatives, including hotels, pubs, bowling and a caravan
park.

 

Over VIP's year to 31 March 2023, three long-let property purchases were
completed for £25.5 million, an M&S supermarket in Rayleigh, a new
Premier Inn at Alnwick and the Coventry leisure investment.  Six smaller,
mainly over-rented, properties were sold for £9.8 million (three pubs, a
bingo hall and two supermarkets).

 

100% of rent has been collected, and 60% of rental income comes from the top 6
tenants - Marks & Spencer, Government/Local Authorities, Ten Entertainment
Group, Premier Inn, Sainsbury's and the Co-operative Group.

 

The Portfolio's weighted average unexpired lease term (WAULT) is now 12.6
years.  80% of the portfolio has indexed and 16% fixed increases, and 96% of
VIP's properties have an EPC (Energy Performance Certificate) Rating of A-C.
 Over the year, rent reviews were completed on 15 of the 39 properties,
adding £0.23 million (+ 6.4%) of rental income.

 

Portfolio Valuation

 

Savills' year end independent valuation of VIP's portfolio totalled
£150.5million, at a net initial yield of 5.8%, against £157.55 million (at a
yield of 5.0%) at end-September 2022.  The total return was

-9.7% over the past six months and -7.8% over the past year.  Both returns
will be significantly better than the benchmark for this portfolio, the MSCI
Quarterly Index.  On a like for like basis, excluding purchases and sales,
the portfolio's capital value fell by 0.1% in the first half of the year and
12.7% in the second half.  Full details will be contained in the Annual
Report for the year to 31 March 2023.

 

The average interest rate payable on VIP's debt is 3.8%. 96% is at a fixed
rate. The average debt maturity is 7.9 years and the Loan to Value ratio is
33%.

 

Enquiries:

OLIM Property Limited, Investment Manager

Tel: 020 7846 3252

louise.cleary@olimproperty.co.uk (mailto:louise.cleary@olimproperty.co.uk)

matthew.oakeshott@olimproperty.co.uk
(mailto:matthew.oakeshott@olimproperty.co.uk)

 

14 April 2023

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