TR Property Investment Trust PLC · LSE:TRY
TR Property Investment Trust — H1 2007 Earnings Presentation
23 slides from TR Property Investment Trust's earnings presentation, November 2007
Slide 1: TR Property Investment Trust Interims
TR Property Investment Trust Interims Chris Turner and Marcus Phayre-Mudge November 2007
Slide 2: TR Property Investment Trust Interims
TR Property Investment Trust Interims (Thames River Capital Ltd) Managed by Chris Turner and Marcus Phayre-Mudge
Slide 3: Contents
Contents Results, performance etc View of markets Current Activity 3
Slide 4: Ordinary Shares - Recent Results (H1 to end September 2007)
Ordinary Shares - Recent Results – (H1 to end September 2007) Share price total return of -20.0% NAV total return of -18.8% (Benchmark -19.1%) Revenue earnings rose 38.7% Interim Dividend increase of 35.3% Outperformed benchmark for the 9th year in a row 10 year share price appreciation +377%* 10 ye
Slide 5: Ordinary Share Dividends
Ordinary Share Dividends Five year historic growth 19.97% pa (Bloomberg) 4.0 Final 3.5 Interim 3.0 2.5 Pence Per Share 2.0 1.5 1.0 0.5 0.0 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 Source: TR Property Investment Trust plc 5 Note: Year end is Marc
Slide 6: Sigma Shares - Recent Results
Sigma Shares - Recent Results – (July 20 to end September 2007) Share price total return of -1.9% NAV total return of -7.1% (Benchmark -5.6%) Maiden revenue earnings of 0.06% Maiden Interim Dividend of 0.2p Special div of 1.1p paid in early October 6
Slide 7: Ordinary Shares TR Performance: NAV, Benchmark
Ordinary Shares TR Performance: NAV, Benchmark (£) TRPIT £ Monthly NAV per share Performance (rebased to £100) to 31-Oct-07 660 TR Property Investment Trust plc EPRA European Property Index* 560 460 360 260 160 60 Oct 97 Oct 99 Oct 01 Oct 03 Oct 05 Oct 07 Source: Bloomberg, S&P’s 7 Note: Prior to Se
Slide 8: Performance Comments
Performance Comments Both share classes have suffered with the sector But both are ahead of the benchmark YTD As a dedicated long only investor - - we offer exposure to the ups and the downs - but we are now a discount on a discount again 8
Slide 9: Ordinary Shares – Discount to NAV - 2001 to date
Ordinary Shares – Discount to NAV - 2001 to date TRPIT £ Monthly NAV per share Performance Rolling Ten Year 31 May 1996 to 31 May 2006 Source: Thomson Datastream 9
Slide 10: Sigma Shares – Discount
10 07 20 1/ /1 07 07 20 0/ /1 31 07 20 0/ /1 24 07 20 0/ /1 17 07 20 0/ /1 10 07 20 0/ /1 03 07 20 9/ /0 26 Sigma Shares – Discount 07 20 9/ /0 19 07 20 9/ /0 12 07 TR Property Sigma Shares - Discount 20 9/ /0 05 07 20 8/ /0 29 07 20 TR Property - Discount 8/ /0 22 07 20 8/ /0 15 07 20 8/ /0 08 07 2
Slide 11: Discount Comments
Discount Comments Ord. Discount has widened since the end of 2006 Reflecting investor sentiment towards property And our holdings in direct property Bought back 12m shares (4.5%) since April 2007 Cost met from sales of assets Buybacks made an eye to the March 08 value of direct prop Sigma also buyin
Slide 12: Ordinary Shares – Current position
Ordinary Shares – Current position Gross and net assets £540m Debenture debt £32m, cash on deposit £32m UK quoted 47%, Continental quoted 39%, direct property 14% Top ten unchanged Major deal has been sale of Slough property at book. (£18.5m 5.5% yield, proceeds on deposit) 12
Slide 13: Sigma Shares – slower pace of evolution
Sigma Shares – slower pace of evolution Top 10 still similar to Ords £27.4m of sales but only £10.6m of purchases ‘nibbling’ at small caps: Argan, Fonc des Murs & FPF (Fr.) IFM, DIC & Hahn (Gr.) Local Shopping REIT (UK) 13
Slide 14: View of the Markets
View of the Markets PERFORMANCE FOCUSED ASSET MANAGEMENT
Slide 15: Property Markets Summary
Property Markets Summary It’s a pricing issue not a fundamental issue The banks control pricing In that sense property is the victim not the cause There is little distress but a lot of worry The market is very quiet Tenant demand is modest but generally stable Sentiment from residential may deterior
Slide 16: Currently – bit of a “non” market
Currently – bit of a “non” market Very quiet. Transaction volumes down 75%+ Lot of property for sale ( mostly rather quietly) Much, but not all, of this “secondary” Forced sellers are open-enders, debt renewers, odd PLCs Bidders are cash rich, or have long term debt in place Asking off 5% to 10% fro
Slide 17: Immediate Outlook – Very quiet
Immediate Outlook – Very quiet Unforced sellers will not sell much below valuation LTV problems but cash flow positive Valuers are being urged to mark down But this is easier to ask than to implement Sentiment says 10% off since September but indices and valuations may not get there by Xmas However
Slide 18: Market in early 2008
Market in early 2008 Key will credit availability (ie big banks balance sheets) Lack of fresh credit creates more forced sellers …and restricts buyers capacity Open ended – more problems ? (M&G, SEPUT) Big PLC’s have only limited fire power Overseas investors on the sidelines. Sovereign funds? Marke
Slide 19: Looking into mid 2008. Wake up time?
Looking into mid 2008. Wake up time? A “non” market cannot exist for too long Buyers and sellers will meet but where? Depends again on bank credit conditions But also on the economy. Tenant Demand (City?) Sentiment from the housing market The level of interest rates The attractiveness of other asset
Slide 20: Tenant Demand
Tenant Demand Last twelve months rental growth – Offices +8.5%, retail +2.2%, industrial +1.5%. Last 3 months annualised are very similar Offices boosted by West End and City. City outlook has worsened with the credit crunch Retail very patchy and incentives increasing Industrial very quiet with vac
Slide 21: Possible yield levels in mid 2008
Possible yield levels in mid 2008 Current IPD Monthly levels at 4.7% initial and 5.7% equivalent Average this decade (in generally benign credit conditions) have been 5.8% and 6.9% A fall to decade average is about -18% Is that enough or too much? Overshoot on the downside or huge demand? Our best g
Slide 22: Prime versus Secondary etc
Prime versus Secondary etc Market assumes that prime will not decline much and secondary will bear the pain Looks logical as the spreads have narrowed and should be expected to widen again Bear case is that the only prime assets that don’t look that vulnerable are prime retail (Liberty) and prime We
Slide 23: Important Notice
Important Notice REGULATORY INFORMATION AND RISK WARNINGS This document is issued for information only by Thames River Capital LLP (“Thames River”) in respect of the funds named below and their relevant sub-funds save for Nevsky Fund Limited and Traditional Funds plc - Eastern European Fund, Global
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