EUROCASTLE INVESTMENT LIMITED AND SUBSIDIARIES Interim Management Statement as at 16 May 2012
(Thomson Reuters ONE) -
Press Release
16 May 2012
Since the year end, Eurocastle Investment Limited ("Eurocastle" or the "Group")
continued to operate its business in accordance with its strategic objectives.
Highlights*
· Following the end of the quarter, Eurocastle has completed the
sale of its remaining 25% interest in the Mars Fixed 1 portfolio and terminated
asset management services in respect of this portfolio. As a result of this
transaction, the Group has received a gross benefit of ?7.0m subsequent to
quarter-end.
· Since the year end, the Group has signed 49 commercial leases
for approximately 15,700 square metres (sqm).
· At end of the first quarter 2012, the level of physical
portfolio occupancy on a like-for-like basis decreased to 81.0% from 84.6% at
the end of 2011 following an expiry relating to the consolidation of a major
tenant's
back-office location in Frankfurt.
· The Group sold 14 properties during the first quarter for total
sales proceeds of ?21.3 million versus a carrying value of ?18.5 million.
* Unless otherwise stated, the information provided excludes the Mars
Fixed 1 portfolio, but includes 100% of the Mars Floating portfolio, in which
the Group has a 50% equity investment.
Financing and Liquidity
* As at 31 March 2012, Eurocastle had a corporate cash balance of ?28.1
million.
* The Group has concluded the restructuring of the Mars Floating facility
which matures in December 2013. Modified terms include revising the
amortisation profile in accordance with an agreed sales plan and the removal
of all contingent guarantees previously provided by the Company. In
addition, the Company will receive a cash distribution of ?1.7m to offset
asset management costs incurred by the Group in respect of the portfolio in
2011 with further distributions to be released in order to cover costs for
asset management and sales activity anticipated till maturity. The remaining
excess cash flow after payment of interest and expenses will continue to be
used to amortise the outstanding loan balance.
Real Estate
Business Review*
* The Group has an interest in 449 investment properties across Germany valued
at approximately ?2.2 billion based on independent valuations carried out in
December 2011, equivalent to an NOI yield of 5.4% based on the 2012 first
quarter's annualised NOI compared to 6.2% at year end. This is due to a
reduction in NOI from December 2011 as a result of anticipated expiries in
Drive and a large long term renewal in the Bridge portfolio at current
market rent. The Group's assets are held in 11 separate financing
portfolios. They comprise a diversified mix of office and retail properties
concentrated in the five major German markets.
First Quarter 2012 Real Estate Portfolio Analysis:
NOI yield
Occupied Passing Annualised Property Average on
No. of space Occupancy rent NOI valuation((1)) lease valuation
Asset properties (sqm) % ?m ?m ?m term %
---------------------------------------------------------------------------------------------
Drive 180 303,672 67.1% 42.9 32.4 803 3.8 4.0%
Bridge 6 185,971 97.1% 27.2 24.9 424 6.1 5.9%
Wave 63 136,884 83.1% 15.7 13.0 200 3.2 6.5%
Mars -
Floating 13 98,130 58.5% 10.8 6.1 166 3.3 3.7%
Turret 63 137,001 97.4% 15.1 13.2 173 3.9 7.6%
Truss 41 80,048 98.3% 8.3 6.6 97 4.8 6.8%
Mars -
Fixed 2 3 33,274 86.9% 6.3 4.7 96 3.7 4.8%
Belfry 27 51,931 98.1% 5.2 4.6 61 4.7 7.6%
Tannenberg 27 47,344 95.6% 5.2 4.4 61 6.1 7.1%
Rapid 18 38,355 100.0% 4.4 4.0 56 9.5 7.2%
Zama 8 28,355 93.3% 3.6 3.3 44 4.4 7.4%
---------------------------------------------------------------------------------------------
Grand
Total 449 1,140,965 81.0% 144.7 117.2 2,182 4.5 5.4%
---------------------------------------------------------------------------------------------
( )
((1))( )Property valuations are based on semi annual third party
independent valuations undertaken in December 2011.
* Eurocastle continues to pursue a real estate divestment programme seeking to
dispose of assets that are believed to be stable, fully valued, non-core or
as required within the framework of certain of its financings. In the first
quarter of 2012, 14 properties have been sold for total sales proceeds of
?21.3 million, realising cash of
?1.1 million after repayment of asset level financings and costs including
?0.7 million of cash retained within the Drive portfolio.
* Good progress continues to be made on new leasing and on renewing existing
tenants. During the first quarter of 2012, the Group signed 49 leases for
approximately 15,700 sqm, including 28 new leases for approximately 7,000
sqm and 21 lease renewals for approximately 8,700 sqm. Since the quarter
end, an additional 8,400 sqm of new leases and 8,700 sqm of renewals have
been signed. The current renewal rate for leases expiring in 2012 is at
66.1%. Excluding a large expiry in the Drive portfolio, the renewal rate was
78.7%.
* The Group continues to seek to moderate capital expenditure committed to new
leasing, focusing it on those leases and portfolios achieving the greatest
economic benefit for the Group and thus maximising cashflow available to
Eurocastle.
* As at 31 March 2012, the Group had total lettable space of 1.4 million sqm
with occupancy at 81.0%, down from 84.6% at the end of 2011 on a like-for-
like basis, following an expiry relating to the consolidation of a major
tenant's back-office location in Frankfurt.
* Unless otherwise stated, the information provided excludes the Mars Fixed
1 portfolio, but includes 100% of the Mars Floating portfolio, in which the
Group has a 50% equity investment.
Market Outlook*
* The positive trend seen in the investment markets in 2011 has continued in
the first quarter of 2012. Investment volume remained on a high level,
decreasing to ?5.2 billion compared to ?5.9 billion in Q1 2011. Closed-ended
funds were the most active buyers in Q1 2012 with a share of 44% of the
overall transaction volume.
* The major five office markets accounted for 47% of the overall investment
activity, with the highest transaction volume in Munich of ?740 million in
the first quarter of 2012. The Munich volume was driven by the sale of the
Allianz headquarters in Unterföhring for ?300 million. Investment in office
assets accounted for 45% of the overall volume, or ?2.3 billion, in the
first quarter of 2012 whereas retail investments were only responsible for
27% of all transactions. In 2011 retail investments had still a share of
45%.
* Rental take-up figures in the major office markets were on similar levels as
in Q1 2011 with a total turnover of 544.800 sqm in Q1 2012. The continued
stable performance of the German economy and an expected positive
development in the German job market is expected to lead to further positive
take-up volumes in office letting markets for the rest of 2012.
* In line with the positive lease up trend, prime office vacancy rates in the
five major markets have decreased from 11.0% in Q1 2011 to 9.9% in Q1 2012.
Prime rents have increased slightly since Q1 2011 with a positive forecast
for the rest of 2012.
* Data and analysis for this section has been extracted from professional
market research sources
Debt Investments
* There were no upgrades and nine downgrades in the first quarter of 2012,
compared to no upgrades and thirteen downgrades in the fourth quarter of
2011.
* Total amortisation principal received in the Group's debt business during
the first quarter of 2012 was
?8.6 million. The majority of these proceeds were received within the CDO V
portfolio which (together with additional available cash) was used to
repurchase ?14.9 million of its own senior debt at an average price of 64%
of nominal realising a gain of ?5.3 million.
Forward-Looking Statements
This release contains statements that constitute forward-looking statements.
Such forward-looking statements may relate to, among other things, future
commitments to sell real estate and achievement of disposal targets,
availability of investment and divestment opportunities, methods of funding
portfolios, timing of completion of acquisitions and disposals, the operating
performance of our investments and financing needs. Forward-looking statements
are generally identifiable by use of forward-looking terminology such as "may",
"will", "should", "potential", "intend", "expect", "endeavour", "seek",
"anticipate", "estimate", "overestimate", "underestimate", "believe", "could",
"project", "predict", "continue", "plan", "forecast" or other similar words or
expressions. Forward-looking statements are based on certain assumptions,
discuss future expectations, describe future plans and strategies, contain
projections of results of operations or of financial condition or state other
forward-looking information. The Group's ability to predict results or the
actual effect of future plans or strategies is limited. Although the Group
believes that the expectations reflected in such forward-looking statements are
based on reasonable assumptions, its actual results and performance may differ
materially from those set forth in the forward-looking statements. These
forward-looking statements are subject to risks, uncertainties and other factors
that may cause the Group's actual results in future periods to differ materially
from forecasted results or stated expectations, including the risks regarding
Eurocastle's ability to achieve its targets regarding asset disposals or leasing
or that Eurocastle will be able to fund or repay its liabilities.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Eurocastle Investment Limited via Thomson Reuters ONE
[HUG#1612544]
Unternehmensinformation / Kurzprofil:
Datum: 16.05.2012 - 08:00 Uhr
Sprache: Deutsch
News-ID 147066
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contact information:
Kategorie:
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