Jersey property investment vehicle with SA interest braves UK/Euro market

Posted On Wednesday, 07 May 2008 02:00 Published by
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CIREF, Corovest International’s property fund listed on the London Stock Exchange AIM Market, today posted interim results for the six months to 31 March 2008. Notwithstanding volatile market conditions the results reflect a strong operating performance and stable net asset value (“NAV”)

The group has significant participation by South African investors.

At 31 March 2008, CIREF held 24 investments in a range of fixed and listed property assets located in the UK, mainland Europe, the Channel Islands and the British Virgin Islands.

As a result of the Euro and Swiss Franc’s strength against Sterling, CIREF’s European investment strategy continued to boost NAV which increased to 151,04p compared to 150,39p at year-end. The £4,5 million devaluation of gross assets, which was necessitated by the international ‘banking and credit crisis’ that weakened demand for real estate assets and diminished property yields, impacted negatively on CIREF’s profitability.  Notwithstanding this economic influencer, net profit excluding the effects of investment and interest rate swap revaluations, increased 251% to £4,56 million compared to the same time in the previous year. An interim dividend of 3,30p per share has been recommended.

Despite severe market conditions the group successfully completed a number of strategic acquisitions and disposals during the period.  CIREF further concluded a successful capital raising of £30,7 million with a share placement at 156p per share primarily to a large institution seeking to secure a greater stake in the group.

CIREF is well-positioned to take advantage of the global property market downturn through opportunistic acquisitions that will offer favourable yields in the future, leveraging its cash resources enhanced by the capital raising during the period.

As the European property market has not declined to the same extent as in the UK, CIREF will continue to boost its European portfolio through further acquisitions. In addition the group’s defensive portfolio, focus on value enhancement, currency diversification and exposure to major development projects across Europe support an optimistic outlook.

Highlights

• Net profit after tax before revaluations increased by 251% to £4.56m (2007: £1.3m)
• Earnings per share of 0.18p (6.69p prior to revaluations – 2007: 4.17p)
• NAV per share after revaluations increased to 151.04p (30 September 2007 – 150.39p)
• 40.6p or 27% of net asset value per share in cash
• Proposed interim dividend per share of 3.30p (in line with payout policy)
• European investment strategy provides strong boost to NAV due to Euro and Swiss Franc strength against Sterling
• Significant disposals in difficult market conditions
• Opportunistic acquisition taking advantage of uncertainty in the market
• Successful capital raising of £30.7m in November 2007


About CIREF

1. CIREF is a property investment and development company incorporated on 28 September 2005 under the laws of Jersey which immediately after incorporation acquired the assets of the Corovest International Real Estate Fund. It invests in commercial real estate primarily in the UK and Europe, with a focus on retail and commercial assets. CIREF's current investments are in the UK and Europe and it will continue to look for value-enhancing opportunities in the UK, Europe and possibly opportunities in other geographic markets.

2. As at 31 March 2008 the portfolio consisted of 24 investments, including:
• four large integrated town centre developments;
• a supermarket and home depot centre in Switzerland;
• a portfolio of 26 Kwik-Fit properties located throughout the UK;
• office buildings in Jersey and London;
• three UK shopping centres;
• 22 UK petrol filling stations; and
• three German portfolios which consist of a shopping centre, 17 supermarkets and convenience stores, two petrol filling stations as well as a McDonalds restaurant.

3. The strategy of the Group comprises four distinct yet complementary elements: stable income projects; major development projects; value-enhancing projects and investments in property collective investment vehicles and property companies. The resources of the Group are intended to be allocated across all four elements with the intention of providing shareholders with a balanced exposure both to lower risk, income-generating assets and assets that have the potential to provide a higher capital return.

4. The Group has an experienced board of nine non-executive directors. Six of the nine directors are connected to the Investment Manager.

5. Further information on CIREF can be found at www.ciref.je


Publisher: eProp
Source: CIREF

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