October 2020 Portfolio Update

Following disclosure on 30 September of the net cash surplus/deficit of each property, today we are enhancing disclosure again, with the release of actual financial results for all properties for the 12 month period to 31 August 2020.

To ensure that all clients have the opportunity to consider this announcement, as usual, the Resale Market will be suspended for 3 working days, re-opening at 11am, on Wednesday, 4 November 2020.

The financial results disclosed include rental income, property operating and works costs, mortgage interest costs, fees paid to Property Partner, dividends, etc.  In future, these financials will be updated every 6 months (i.e. at 31 March and 30 September each year).

The financial results can be found on each property’s investment page, in the Financials section, under Rental Income Breakdown.


Mortgage value reductions

As part of our 30 September 2020 update, we increased the mortgage values on geared properties to include six months of unpaid interest accrued during the payment holidays that we agreed with the lenders. For 32 of these properties, the rolled-up interest and therefore the mortgage values were overstated. Below is the list of properties.

Properties:
Spencer Parade, Northampton
Devonshire Place, Brighton & Hove
Hamilton House, Liverpool
The Warehouse, Chester
Blackfords Court, Cannock
Queen Street, Sheffield
Hammonds Landing, Sowerby Bridge
Barton Court, Warrington
Heritage Court, Dinnington
Agecroft Apartments, Pendlebury
Molyneux Court, Liverpool
Stokes Mill, Stalybridge
Ansteys Court, Torquay
Prospect Court, Market Drayton
Lydan House, Redditch
Carlisle Mews, Gainsborough
St Catherines Mews, Lincoln
Compass Court, Eastbourne
Sandars Maltings, Gainsborough, Lincolnshire
Flats 4, 7, 9 Anchor Point, Surrey Quays
Flats 15, 25, Anchor Point, Surrey Quays
Jubilee Mansions, Barons Court
Thornwood, Eastbourne
Flats 1, 5-7 Tower Mint Apartments
Red Lion Court, Greenford
Dutch Quarter I, Colchester
Dutch Quarter II, Colchester
Garden Court, West Drayton
Cherington Road, Hanwell
St David’s Lodge, Hastings
Finch Heights, Hastings
Southwood Road, Hayling Island

We have now corrected these, resulting in a decrease in the mortgage value on each of the 32 properties and an equivalent increase in their Latest Valuations of approximately 2%. The overall impact of this change across all properties is an increase in the Latest Valuation of the portfolio of 0.6%.


Investment Plans

We have recommenced the Income Investment Plan which automatically selects a portfolio of 10 properties with the strongest dividend yields (net rental income). The target average dividend yield (after all fees and costs) is a minimum of 3%*; based on Resale Market trading prior to this close period, portfolios with average yields of 3.7%* were available.

The Capital Discount Investment Plan continues, selecting a portfolio of 20 properties trading with the largest discounts to independent valuation.  The target average discount is a minimum of 20%**; based on Resale Market trading prior to this close period, portfolios with average discounts of 25%** were available.

The next quarterly announcements and close periods are:

  • 18 December 2020; market closed 11am that day until 11am, 23 December 2020
  • 31 March 2021; market closed 11am that day until 11am, 5 April 2021

If you have questions about these announcements, please email support@propertypartner.co.

Thank you for your continued support.

The team at Property Partner

* Prior to the crisis, all dividends were quoted before the deduction of the AUM fee; since 30 September 2020, all dividends are now quoted after the deduction of the AUM fee, a reduction in any quoted dividend of 1.2% p.a.

** RICS-certified independent valuations for all residential properties were announced on 30 March 2020. These valuations took place in the weeks before the escalation of the COVID-19 crisis, so are an historical reference to the market prior to disruption by the crisis. They do not take account of the current expected impact on the economy and the property market, and investors should not rely on these revaluations as a reflection of property value whilst the market is disrupted by the crisis.