Frequently Asked Questions
Performance year ended 30 June 2020
Net Asset Value per share
Ordinary Share price
MSCI UK Property Index
FTSE All-Share Index
The relative outperformance was primarily driven by the high allocation to Industrial, logistics and distribution assets (43 per cent of portfolio weighting by capital value) and the sustained yield premium, assisted by the consistently low vacancy rate which stood at 3.3 per cent at the year end (versus over 7.6 per cent for the Index).During 2019 the capital return for the portfolio was -5.6 per cent, compared to MSCI which recorded a capital return of -6.8 per cent.
The retail market continued to suffer with the pace of valuation falls accelerating further, led by the anticipated rebasing of rents across much of the high street and shopping centre submarkets. Against this background, the Company’s retail portfolio as a whole delivered -12.4 per cent compared to -12.6 per cent for MSCI. A large portion of the Company’s retail exposure is low rented, functional, retail warehouses. The majority of the Company’s tenants in this space were able to remain open throughout lockdown. This was demonstrated by the 94 per cent collection from this part of the portfolio for the March to June quarter, with monthly payment plans having been put in place to assist some tenants with cashflow where justified.
Performance since 30 June 2020
Net Asset Value per share (as at 30/09/20)*
Ordinary Share price (as at 12/11/20)
Portfolio (as at 30/09/20)*
MSCI UK Property Index (as at 30/09/20)*
FTSE All-Share Index (as at 12/11/20)
* The latest data available as the Portfolio is valued quarterly
The unaudited net asset value (‘NAV’) per share of the Group as at 30 September 2020 was 94.8 pence. This represents a decrease of 1.9 per cent from the audited NAV per share as at 30 June 2020 of 96.6 pence and a NAV total return for the quarter of -1.3 per cent There was further downward pressure on valuations in our retail portfolio with the sector remaining troubled. The retail warehouse portfolio was less affected with these properties almost entirely let to functional, convenience, non-fashion tenants. There has been much debate around the future shape of the office market combined with a recent increase in available space and this sector has delivered a muted performance over the period. Industrial, logistics and distribution, which accounted for 44 per cent of the Company’s portfolio as at 30 September 2020, continue to offer relative resilience, reflected in increased investment demand and strong take-up.
The share price as at 12 November 2020 was 60.0 pence per share, which represented a discount of 36.7 per cent to the NAV per share. The share price has increased by 7.1 per cent since the year end following a bounce in early November after the announcement by Pfizer on the results of their first interim analysis of their phase 3 study on the development of a vaccine against Covid-19.
Stock markets worldwide have seen sharp falls since the pandemic gained traction. Real estate has also seen significant downward movements in share prices with large discounts being witnessed across the listed sector. This likely reflects the concerns investors have about the impact of the virus on businesses ability to pay rent and the long-term implications this may have on both future dividends and property valuations.
As we continue to monitor ongoing developments regarding the outbreak of Covid-19, both the Board and the Manager are taking every precaution to safeguard the health and wellbeing of staff, occupiers and stakeholders. The Manager has robust business continuity plans in place and is maintaining operations in these challenging times. Although a work from home policy has been introduced the asset and property managers are in regular contact with tenants, providing support where felt necessary. They are also ensuring that essential services are maintained across the portfolio.
Collecting rent is challenging, particularly in the retail portion of the portfolio, where some tenants have had a period where they were not trading or have just returned to operations at a reduced level with social distancing precautions in place.
The Board are very aware of how important a regular income is to many shareholders. As at the middle of November there is a much clearer picture of the rent collection outcomes with the overall collection rate for the portfolio for quarter 2 and quarter 3 of 2020 at approximately 94 per cent. The latest data for quarter 4 suggests collection rates at a similar level.