Teesland Advantage Property Income Trust Limited

(“TAP”) or (“the Company”)

 

Admission to the Official List and launch of £116 million property fund

 

Teesland Advantage Property Income Trust Limited (“TAP” or “the Company”), a closed ended commercial property investment company incorporated in Guernsey, has successfully raised £76 million through a Placing and Offer for subscription by KBC Peel Hunt Ltd of 76 million ordinary shares at an issue price of 100p each.  Dealings are due to commence in the Company’s shares today.

 

TAP, which invests in commercial property in the United Kingdom and Channel Islands with the objective of providing shareholders with an attractive level of income and the potential for income and capital growth, is advised by Teesland Asset Management Limited, a wholly owned subsidiary of Teesland plc.

 

TAP was incorporated in June 2004 and has already acquired a portfolio of 31 properties, funded by a facility from Bank of Scotland and also unsecured loan notes issued by Teesland plc and Ancient Mariner Properties Limited, TAP’s initial shareholders.   The funds raised and a new bank facility of up to £57 million, with Bank of Scotland, will be used to repay the existing facility and redeem in full the loan notes.

 

Upon admission, a further four properties will be acquired, at which time the Company will be fully invested in a property portfolio with a capital value of £116,625,000.  On the basis of the assumptions set out in the prospectus, upon admission the net asset value of an ordinary share in the Company will be approximately 95p per share. 

 

The property portfolio is diversified across the UK and Channel Islands and comprises institutional quality buildings let on leases with an unexpired average lease term (weighted by current rental income) of 9.5 years and a tenant covenant profile above the IPD TICCS average.  The properties will give a balance across the main commercial property sectors with an overweighting compared to the IPD Annual Index 2004 in the retail warehousing sector, which Teesland Asset Management believes is likely to be one of the best performing commercial property sectors over the next five years. 

 

The Directors expect that on the basis of the assumptions set out in the prospectus and in the absence of unforeseen circumstances, dividends totalling 5.783p will be paid for the period from the date of admission to 31 December 2005.  For the first quarter 2006, it is expected that, on the same basis, a dividend of 1.625p will be paid.

 

The Company has the power to borrow up to 65% of gross assets, although at present, it is the Directors intention to put in place long term borrowings equal to approximately 40% of the Group’s gross assets and that aggregate borrowings will be limited to 50%.

 

Mickola Wilson, Chief Executive of Teesland plc, commented:

“The high level of take up we experienced for the Placing and Offer is testament to the strength of demand for this type of product, together with the quality of the portfolio and the potential for growth that will be realised by the Teesland team, which specialises in focussed property asset management.    We believe that the commercial property market will continue to perform well as an investment over the next five years and we look forward to delivering value to those who have invested in the Company.”

 

Tim Cockroft, Chief Executive of KBC Peel Hunt, commented:

“We are delighted to have successfully raised £76 million through the placing and offer for subscription for TAP. Institutional investors have shown strong support for TAP which highlights favourable investor sentiment towards the commercial property sector.”

 

For further information:

Mickola Wilson, Teesland plc:                                                                             020 7659 4700

Jeremy Carey/Richard Sunderland: Tavistock Communications Limited                       020 7920 3150

David Davies/Jonathan Marren: KBC Peel Hunt Ltd                                         020 7418 8900