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

Value and Indexed Property Income TrustAnnouncement

02/04/2024 07:00

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RNS Number : 7253I  Value and Indexed Prop Inc Tst PLC  02 April 2024

Value and Indexed Property Income Trust PLC (VIP)

 

£5.75 million Purchases and Year End Portfolio Valuation

 

Value and Indexed Property Income Trust PLC (VIP) announces the acquisition of
two freehold leisure investments at Ashford (Kent) and Peterborough for £5.75
million at a net initial yield of 8.1%. They are both let to Hollywood Bowl
Group plc on full repairing and insuring leases without breaks to 2040, with
annual rental increases in line with the Retail Price Index (RPI), capped at
3% p.a. and collared at 2% p.a.

 

VIP is now fully invested in direct commercial property, delivering long,
strong, index-related income. Its dividend, which has risen for each of the
last 37 years, is fully covered. 100% of rent due has been collected
throughout the year, and 54% of rental income comes from the top 5 tenants -
Marks and Spencer, Government/Local Authorities, Ten Entertainment Group,
Premier Inn, and Sainsbury's.

 

Over the year to March 2024, three leisure properties with annual RPI-linked
rent increases were bought for £11.85 million, at a net initial yield of
7.8%, rising to 8.5% in May 2024. Their average unexpired lease term was 14.4
years.  Seven properties were sold - VIP's last four Stonegate pubs, two
short-let petrol filling stations and an over-rented convenience store for
£13.3 million, at just above their valuation total at an average net yield of
7.5%. Contracts were also exchanged for the sale of a pub to the tenant for
£3.7 million, 7.2% above valuation at a net yield of 4.7%, with completion
set for July 2024.

 

The portfolio's weighted average unexpired lease term (WAULT) is now 11.6
years to the earliest break options.  82% of the portfolio's rental income
now has index-related and 14% fixed increases, and 97% of VIP's properties
have an EPC (Energy Performance Rating) of A-C. Over the year, rent reviews
were completed on 11 properties, adding £0.4 million (+4.9%) of rental
income.

 

VIP has no empty properties and no offices. 29% of the portfolio is in
supermarkets, 28% is in warehouses/industrials, 27% in bowling, a health club
and a caravan park, and 15% in hotels and pubs.

 

The average interest rate payable on VIP's debt is 4.0% (93% fixed), with an
average maturity of 6.9 years and a 36% Loan to Value ratio.

 

Portfolio Valuation

 

Savills' year end independent valuation of VIP's property portfolio at end
March 2024 totalled £138.1 million, at a net initial yield of 6.6%, against
£135.5 million (at a net yield of 6.1%) at end-September 2023. Rental income
offset a capital decline of 3.4% over the past six months. So, the total
return was 0.0%, which should be above our benchmark, the MSCI UK Quarterly
Property Index, and -1.8% over the past year, broadly in line with the Index.
Full details will be available in VIP's 2024 Annual Report after the MSCI UK
Quarterly Property Index return for last quarter is published.

 

Enquiries:

OLIM Property Limited, Investment Manager

Tel: 020 7846 3252

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

 

2 April 2024

 

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