EUROCASTLE INVESTMENT LIMITED AND SUBSIDIARIES Interim Management Statement as at 14 May 2013
(Thomson Reuters ONE) -
Press Release
14 May 2013
Highlights*
· Eurocastle obtained approval from the holders of its convertible
securities to lower the conversion price from ?0.30 to ?0.05 per share in
exchange for, inter alia, the right for the Company to require a conversion of
all outstanding convertible securities. Conditional upon such conversion, the
Company reached agreement with the Manager to rebase the fees under its
Management Agreement which will preserve capital for future investment. The
expected savings for 2013 amounts to ?13.1 million, and an annual run rate of
?17.5.
· Eurocastle also intends to reinstate an annual dividend of ?0.50
per ordinary share, commencing in the third quarter of 2013 subject to board
approval and other legal requirements.
· On 12 April 2013, Eurocastle converted all outstanding
convertible securities to ordinary shares and increased the share count by
3,398,474,685 shares resulting in the adjusted fully diluted (NAV) per share as
at 31 December 2012 reducing from ?0.46 to ?0.09.
· Eurocastle has announced that it has received approval to
complete a consolidation of shares at a ratio of 200:1 with respect to the
existing ordinary share capital of the Company. The effect was to reduce the
number of shares in issue from 3,525,900,465 to approximately 17,629,502
resulting in an adjusted NAV of ?17.43 as at 31 December 2012.
· Since the quarter-end, the Group has signed 21 commercial leases
for approximately 9,910 square metres (sqm).
· At end of the first quarter 2013, the level of physical
portfolio occupancy on a like-for-like basis decreased to 78.8% from 81.2% at
the end of 2012 due to an early surrender of a major tenant's lease in the Drive
portfolio that had been terminated. In return for the early surrender, a
surrender premium of ?4.2 million was received.
· The Group sold 7 properties during the first quarter for total
sales proceeds of ?55.7 million versus a carrying value of ?56.3 million.
* NAV excludes the Mars Floating facility as the financing is non-recourse
to Eurocastle and not callable as a result of any changes in the value of the
assets.
Financing and Liquidity
* As at 31 March 2013, Eurocastle had a corporate cash balance of ?37.4
million. Net of corporate liabilities, this amounts to ?31.2 million.
* In January 2013, the Group secured a restructuring of the senior loan on the
Drive portfolio. Modified terms include a 1 year extension to January 2014
and interim amortisation targets to be met through an agreed sales
programme. Sales fees of 3.5% of gross sales proceeds (equivalent to amount
of ?14.1 million) shall be for the benefit of the Group if these targets are
met. In addition, Eurocastle will receive asset management fees in relation
to the Drive portfolio of ?1.7 million per annum. The Group remains in
constructive discussions with the lenders of the junior facility.
* In light of the upcoming maturity of the Mars Fixed 2 portfolio in June
2013, the Group is engaged in positive discussions with the facility lender
with regards to a medium term extension.
Real Estate
Business Review
* The Group has an interest in 415 investment properties across Germany valued
at approximately ?2.0 billion based on independent valuations carried out in
December 2012, equivalent to an NOI yield of 5.2% based on the 2013 first
quarter's annualised NOI compared to 5.6% at year end. 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 2013 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 157 230,940 58.7% 35.0 21.2 663 4.4 3.2%
Bridge 6 186,237 97.3% 27.4 25.3 407 5.7 6.2%
Wave 56 119,492 80.0% 13.7 10.1 182 3.3 5.5%
Turret 63 137,039 96.9% 14.9 13.1 169 3.8 7.7%
Mars -
Floating 9 80,334 57.0% 8.4 4.5 120 3.1 3.7%
Mars -
Fixed 2 3 34,374 89.8% 6.5 4.6 96 3.1 4.8%
Truss 41 77,967 95.7% 8.2 7.2 95 4.1 7.6%
Belfry 27 49,880 94.3% 5.0 4.3 60 3.9 7.1%
Tannenberg 27 46,857 94.5% 5.0 4.1 59 5.4 6.9%
Rapid 18 38,641 100.0% 4.4 4.0 55 8.5 7.3%
Zama 8 28,542 93.9% 3.7 3.3 45 3.6 7.4%
---------------------------------------------------------------------------------------------
Grand
Total 415 1,030,303 78.8% 132.2 101.7 1,951 4.5 5.2%
---------------------------------------------------------------------------------------------
( )
((1))( )Property valuations are based on semi annual third party
independent valuations undertaken in December 2012.
* Eurocastle continues to pursue a real estate divestment programme seeking to
dispose of assets that are believed to be stable, fully valued or as
required within the framework of certain of its financings. In the first
quarter of 2013, 7 properties have been sold for total sales proceeds of
?55.7 million.
* Good progress continues to be made on new leasing and on renewing existing
tenants. During the first quarter of 2013, the Group signed 32 leases for
approximately 13,549 sqm, including 20 new leases for approximately 2,570
sqm and 12 lease renewals for approximately 10,979 sqm. Since the quarter
end, an additional 1,240 sqm of new leases and 8,670 sqm of renewals have
been signed. The current renewal rate for leases expiring in 2013 is at
42.9%.
* 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 2013, the Group had total lettable space of 1.3 million sqm
with occupancy at 78.8%, down from 81.2 % at the end of 2012 on a like-for-
like basis due to an early surrender of a major tenant's lease in the Drive
portfolio that had been terminated. In return for the early surrender, a
surrender premium of ?4.2 million was received.
* 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 investment volume in Germany amounted to ?7.1 billion in the first
quarter of 2013. This represents an increase of 35% compared to the same
quarter last year. The five major office markets accounted for 56% (versus
Q1 2012 of 49%) of the overall investment activity in the first quarter of
2013, with the highest volume in Munich at ?0.7 billion. Due to the lack of
core product, secondary cities (those outside of the Top 5) have experienced
a high demand for investment opportunities from investors.
* Office investments are still dominating German investment markets with ?2.8
billion followed by retail investments with ?1.7 billion. Foreign property
investors accounted for approximately 25% of the turnover in the first
quarter of 2013, down from 30% for the full year 2012.
* Rental take-up figures decreased in major office markets by 16% compared to
the first quarter of 2012, with an office turnover of 490,000 sqm. Vacancy
rates in the five major markets have decreased from 9.9% in the first
quarter of 2012 to 9.2% in the first quarter of 2013. In line with the lower
vacancy, prime rents have increased slightly and are expected to continue to
improve.
* Data and analysis for this section has been extracted from professional
market research sources
Debt Investments
* There was one upgrade and eight downgrades in the first quarter of 2013,
compared to two upgrades and twenty five downgrades in the fourth quarter of
2012.
* Total amortisation principal received in the Group's debt business during
the first quarter of 2013 was
?3.1 million. The majority of these proceeds were received within the CDO V
portfolio which (together with additional amortisation proceeds received in
December 2012) was used to purchase ?25.9 million of CMBS rated at BBB+ at
an average price of 92.95% of nominal.
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, extend, refinance 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#1701352]
Unternehmensinformation / Kurzprofil:
Datum: 14.05.2013 - 08:00 Uhr
Sprache: Deutsch
News-ID 259531
Anzahl Zeichen: 13299
contact information:
Town:
St Peter Port
Kategorie:
Business News
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