London office developer Helical has posted a 7.3% uplift in NAV for the year to 31 March 2022.
The highlights of the results were:
- EPRA net tangible asset value per share up 7.3% to 572p (31 March 2021: 533p)
- EPRA net disposal value per share up 13.6% to 551p (31 March 2021: 485p)
- Net asset value up 13.0% to £687.0m (31 March 2021: £608.2m)
- Total Return on EPRA net tangible assets of 10.2% (2021: 4.5%)
- IFRS profit after tax increased to £88.9m (2021: £17.9m)
- Net rental income up 24.8% to £31.2m (2021: £25.0m)
- EPRA earnings per share of 5.2p (2021: loss of 1.8p)
- Final dividend proposed of 8.25p per share (2021: 7.40p), an increase of 11.5%
- Total dividend for the year of 11.15p (2021: 10.10p), an increase of 10.4%
- Net borrowings of £402.9m (31 March 2021: £193.9m)
- Loan to value increased to 36.4% (31 March 2021: 22.6%).
Portfolio update
- Portfolio valued at £938.8m (31 March 2021: £740.2m), a 7.0% valuation increase on a like-for-like basis
- Contracted rents of £46.4m (31 March 2021: £37.8m) compared to an ERV of £67.1m (31 March 2021: £52.1m)
- WAULT of 5.6 years (31 March 2021: 6.9 years)
- Vacancy rate reduced from 10.5% to 6.7%.
The group boosted its development pipeline with the acquisition of 100 New Bridge Street, EC4, during the year, which will deliver a 185,000 sq ft office scheme planned for early 2025. Completion of the development of 33 Charterhouse Street, EC1, a 205,369 sq ft is on track for September 2022.
The group sold 14 residential units at Barts Square, leaving 14 apartments available at the year end of which one has since been sold and two are under offer.
A total of 12 new lettings were completed across the portfolio, totalling 54,118 sq ft, delivering contracted rent of £3.3m at 1.8% above the 31 March 2021 ERV.
The group collected 95.8% of all rent contracted and payable for the financial year, with 2.2% to be collected following the end of the Government’s general moratorium and 2.0% having been written off or agreed concessions.
Post year end, the group has sold disposals Trinity, its last remaining asset in Manchester, for £34.55m, and 55 Bartholomew, EC1, for £16.5m.
Gerald Kaye, chief executive, said: “Today marks the opening to the public of the Elizabeth Line, one of the largest transport infrastructure projects in the UK, increasing Central London’s rail capacity by 10% and bringing an additional 1.5 million people within 45 minutes of Central London. Our £1bn portfolio of sustainable, amenity rich London offices, of which 99% by value are situated within a 12 minute walk of a nearby Elizabeth Line station, will continue to benefit from their proximity to this new arterial route through Central London. It is this connection, together with the improving strength of the prime London office market, that has underpinned a strong set of results after emerging from the Covid-19 pandemic following two difficult years.
“Our Total Accounting Return (TAR) for the year, a key performance indicator for Helical, was 15.0% on our net assets measured under IFRS and 10.2% based on our EPRA net tangible assets. Over the three years to 31 March 2022, the compound annual growth rate of our EPRA TAR was 7.8% pa, an indication of the strength and consistency of the financial performance of the Group, despite the challenges of the period. These results were driven by growing rental income and strong valuation surpluses from both our completed development schemes, now held for long term income growth and future asset management opportunities, and our schemes under development.
“We are a specialist developer and investor in prime Central London real estate, creating inspiring and sustainable, best-in-class office buildings. London is a leading world city, a safe haven, attracting a mix of established and growing businesses seeking a base for their operations and well capitalised investors looking to invest their funds.
“We will continue to see bifurcation between the best-in-class new sustainable buildings and the older less sustainable buildings. This will be reflected in strong rental growth for the former and rental decline for the latter. Helical is well positioned to capitalise upon a period of opportunity within the sector over the next 10-20 years, changing the older “brown” buildings into “green” sustainable buildings.
“In the last year, we have deployed capital to acquire 100 New Bridge Street, EC4, with this exciting redevelopment due to start by the end of 2023, following the expiry of the current tenancies. Along with 33 Charterhouse Street, EC1, due for completion in September 2022, and continuing asset management opportunities in the remaining, completed investment portfolio, we are optimistic that our successful track record of outperforming the market and delivering strong financial returns will continue.”
HLCL : Helical delivers solid annual results