Tamar European Industrial Fund (TEIF) has reported asset sales of a total gross consideration of GBP66.07m for the year ended 31 December 2012, a 3.34 per cent excess on the pre-sale valuations before transaction costs and tax.
Disposals comprised 15 assets and a further six individual units.
Of these sales, 11 assets were located in the Nordics, demonstrating further progress on the company’s strategy to dispose of its Nordic assets, with these sales achieved at a 0.8 per cent premium to valuation.
In December, the group made its first disposal from the trading portfolio it acquired in October 2011. The asset in Trappes was sold at 18 per cent above the September 2012 CBRE valuation and within the projected timeframe.
Following asset sales and regular amortisation, debt of GBP51.2m (2011 - GBP27.3m) was repaid in the year. At the year-end, gearing net of unrestricted cash balances stood at 42.3 per cent (2011- 52.1 per cent).
Asset management activities continue to add and protect value with ongoing leasing activity resulting in 33 new leases signed and 78 leases renewed during the year, representing over 130,000 sqm of space and GBP6.7m of gross annualised income. A high level of tenant retention was achieved during the year at over 73 per cent by floor area.
Two dividend payments were made, in April and September 2012 of 0.75p per share each. The board proposes to pay a further interim dividend of 0.75p per share on 26 April 2013 to shareholders on the register on 12 April 2013.
Giles Weaver, chairman, says: “I am pleased to report that the Group has continued to make progress on its Nordic sales programme whilst retaining value through new leasing and the re-gearing of existing leases. Following the sales of Fredrikstad and Moss in December 2012, the entire Norwegian portfolio has now been disposed of with a total of 11 Nordic assets sold over the year at a premium to book value. There are now just four assets remaining (three in Sweden and one in Finland) representing nine per cent of the fund’s value.
“Sales have also been made from the wider portfolio, including the ongoing break-up of estates in Belgium and France where units are being sold to owner-occupiers. The sale of vacant units has also had a positive impact on the overall occupancy of the portfolio. The first sale from the portfolio purchased in 2011 proved a notable success with the sale of an asset at an 18 per cent premium to the September 2012 CBRE valuation, following a successful lease up of the whole asset. Overall, gross sale prices have been achieved at prices above valuation but when disposal costs are stripped out including CGT, debt prepayment fees and swap break fees this translates to net proceeds 6.5 per cent lower than valuation.
“It remains the board’s intention to return excess cash generated from the disposal programme to shareholders and surplus cash is being transferred into sterling to mitigate, as far as is possible, currency fluctuations and facilitate a distribution. With the December 2013 extension to the Deutsche Bank financing coming into focus, the board are being prudent in looking to satisfy the terms of this extension before any cash is distributed. Discussions are ongoing with the bank to enable the fund to move forward, notwithstanding that the board continue to maintain the half yearly dividend in the interim.
“The board considers that the pending acquisition of Tamar Financial Services Limited by PATRIZIA AG should be a benefit to the fund in that the resources of Tamar should be substantially increased and the substance of Tamar as an entity is inherently stronger.”