Standard Life Investments Property Income had a great 2015

Standard Life Investments Property Income delivered both strong NAV and share price performance over the
course of 2015. The NAV total return for the year was 15.5%, driven by strong capital growth in the property portfolio. The share price total return was 15.5% and the Company’s shares continued to trade at a premium to NAV of 2.8% as at 31 December 2015. Both the NAV and share price total return outperformed the FTSE All-Share REIT index total return of 10.6% and the FTSE All-Share Index of 1.0%.

In December 2015,they acquired a portfolio of 22 assets for £165m funded through a mixture of equity issuance, debt and existing cash resources. They say the acquisition of this portfolio further diversifies the sector, tenant and regional exposure of the company, offers significant asset management opportunities to create further value and will
enhance dividend cover going forward. In addition to this, the company acquired a further 9 properties in the year for £49.5m and disposed of 10 properties for a total of £58.7m. As a result of this activity the portfolio is now valued at £452m, an increase of £182m in the year.

In order to help fund the acquisition of the portfolio mentioned above the company restructured its borrowings with RBS in December 2015. Borrowing facilities went from £84.4m to £139. As at 31 December the loan to value ratio (assuming all cash is placed with RBS as an offset to the loan balance) was 28.1%. The bank covenant level is 65%. They say they are in advanced negotiations to refinance all existing loan facilities on favourable terms and expect to make a further announcement on this shortly.

The Company paid dividends totalling 4.644p relating to the 2015 financial year. Subsequent to the acquisition of the portfolio described above, which should boost dividend cover going forward in the absence of unforeseen  circumstances, the Board announced their intention to increase the dividend by 2.5% in 2016 to four quarterly payments of 1.19p.

SLI : Standard Life Investments Property Income had a great 2015