Helical Plc – Latest Trading Update

Helical today releases an update covering its trading activities for the period 1 April 2020 to 9 October 2020 (“the Period”).

Commenting on the Company's activities, Gerald Kaye, Chief Executive, said:

“As the Government attempts to navigate a delicate course between protecting the health of the population and providing support for UK businesses and the wider economy, we have been working with our tenants to guide them through this painful and disruptive period.

“The success of our rent collection during the Period is a testimony to the quality of our portfolio, the strength of our relationships with our tenants and the hard work of our dedicated employees.

“Frustratingly, we are now on course for an ongoing period of weak economic activity with the country unlikely to emerge from this crisis before 2021. In the meantime, we shall continue to act to preserve Shareholder value whilst seeking new opportunities for continued future growth.”

Operational Performance

Rent Collections

• We have now collected 94.7% of all rent contracted and payable for the March quarter. Of the balance, we have granted rent holidays on 2.4%, mainly to our F&B tenants, leaving 2.9% subject to ongoing discussions with tenants.
• For the June quarter, we have collected 91.3% with a further 0.1% to be received under payment plans shortly. Of the balance, we have granted rent holidays on 4.6%, again this is mainly to our F&B tenants, leaving 4.0% subject to ongoing discussions with tenants
• We have collected 84% of the September quarter rents demanded to date, compared to 77% and 85% at the corresponding dates for June and March, respectively. Through further cash receipts from monthly payments, we anticipate that we will have collected between 90% and 96% of this quarter's rent by the end of December.

Portfolio Matters

• In our 50:50 joint venture with AshbyCapital, we exercised the option under the Development Agreement with the City of London to secure a new 150 year lease at 33 Charterhouse Street, EC1.  Following the grant of the new lease, Mace was appointed as principal contractor. Work is progressing on site, with all of the pre-existing structure now removed, the basement raft substantially poured and the core being built, currently up to the sixth floor. The c. 200,000 sq ft office development is targeted for completion in September 2022.
• Helical continues to deliver on its new sustainability strategy, with the 33 Charterhouse Street office development achieving the UK's first BREEAM 2018 New Construction “Outstanding” rating for the design stage.
• On 28 April 2020, we completed the sale of 90 Bartholomew Close, Barts Square, EC1, to La Francaise Real Estate Partners International, a pan-European investment business acting on behalf of a French collective real estate investment vehicle. The disposal price of £48.5m reflected a net initial yield of 3.92% (£1,594 per sq ft capital value).
• In Phase One of our residential scheme at Barts Square, we completed the sale of four apartments and have exchanged contracts on one further apartment, leaving just one apartment available for sale. In Phase Two, we completed the sale of 26 apartments during the period, six of which have exchanged since 1 April, and the freehold sale of the former marketing suite at 56 West Smithfield. In total, 58 apartments have been sold in the second phase, leaving 33 apartments remaining to sell.
• At 55 Bartholomew Close, EC1, Clevertouch has agreed a five year lease for the entire 2,564 sq ft ground floor at a headline rent of £75.00 psf, a 15% premium to 31 March 2020 ERV.
• In Manchester, the refurbishment of the Fourways reception and atrium has now been completed, providing new link bridges between the office floors.

Financing

• At 30 September 2020, the Group had drawn £360m of its £531m of investment facilities with an average weighted maturity term, upon exercise of its £400m RCF's two one-year extension options, of 5.1 years.

In our joint ventures:

• We secured a £140m facility from Allianz to finance the development of 33 Charterhouse Street, EC1. The facility has a four-year term, with the option to extend to a fifth year. It is anticipated that the first drawdown will be in October 2020, from which point all future anticipated development costs will be fully funded by the facility.
• The Barts Square development facility provided by HSBC has been restructured to reflect the completion of the development activities on site. The £42m combined facility (previously £118m) has enabled equity to be returned to Helical and our joint venture partner, The Baupost Group LLC, and is repayable in December 2021.
• At 30 September 2020, the Group had £49m of cash deposits available to deploy without restrictions and a further £15m of rent collected in bank accounts to service loan interest and fees. In addition, the Group has £251m of undrawn loan facilities.

Sustainability

• In June 2020, Helical announced its “Built for the Future” sustainability strategy which sets out the Company's vision and ambitions, together with the governance structure in place to help achieve the desired objectives and targets.
• We have achieved the UK's first BREEAM 2018 New Construction “Outstanding” rating for the design stage of 33 Charterhouse Street, London EC1. We are also pleased to have achieved EPRA Sustainability Best Practice Recommendation “Silver” award, improving on the “Bronze” awards of previous years.