Standard Life Investments Property Income Trust has reported half-year results that show an 11.5% fall in net asset value (NAV).
The company’s NAV per share fell to 79.6p on 30 June 2020 (Dec 2019: 89.9p) due to an 9.9% drop in the value of its property portfolio to £447.3m.
NAV total return in the six months to 30 June 2020 was -9.0%. Over the longer term the company has continued to outperform its peer group returning 143.9% over 10 years compared to the AIC Property Direct – UK Commercial sector total return of 36.0% and open ended property funds total return of 53.0%.
On a share price total return basis it delivered -30.9%, as shares moved from a premium of 1.2% to a discount of 23.9% as at 30 June 2020. Again, over the longer term the company has outperformed its peer group returning 76.5% over ten years compared to the AIC Property Direct – UK Commercial sector total return of 8.3%.
It paid dividends in the six months of 2.38p per share (H1 2019: 2.38p), but EPRA earnings were impacted by reduced rent receipts falling to 1.96p (June 2019: 2.42p).
As at 31 August 2020, rent collection for the third quarter was 75% and 87% for quarter two, which averages out to 81% for the two quarters.
James Clifton-Brown, chairman, said: “From a real estate perspective, our investment manager forecasts that valuations will remain weak, although they are unlikely to experience the declines we have seen in the first six months of this year. In terms of rent collection, some tenants, depending on what sector they are in, will continue to have difficulty in meeting rental obligations over the remainder of this year, and quite possibly for the first half of 2021. However, indicative evidence from our own portfolio is that most tenants are willing to work with their landlords to come to a mutually acceptable outcome for rents due and hence it is hoped there will be a fairly rapid pick-up in activity in 2021.
“This recovery will not be uniform across the main real estate sectors with the accelerating move away from high street retail to online retail. The resultant requirement for industrial space means the industrial sector is likely to continue to be the best performing sector. While performance has been weak in the short-term, your Company’s portfolio is well positioned to take advantage of this trend given the portfolio had a 53% weighting to Industrial (and only 8% in retail) as at 30 June 2020.”
SLI : Standard Life Investments Property Income reports COVID-hit half-year results