Business & Trading Update

7 April 2021

Helical today provides a business and trading update for the period 1 October 2020 to 31 March 2021 ("the Period"). 

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

"There appears to be a growing sense of optimism that the easing of the current restrictions by the Government will continue as scheduled and that, over the next few months, businesses of all types will resume operations in line with the "roadmap" that has been outlined. It is to be hoped that there are no setbacks on this return to normality.

"As part of this we expect to see the increasing reoccupation of all our buildings by our tenants, supported and supplied by the many local businesses that rely on this for their custom.

"In the meantime, the quality and appeal of the buildings in our portfolio has been reconfirmed by the letting of space at rents above ERV and the high rent collection achieved throughout the last year. We were especially encouraged to agree a lease for the whole of Kaleidoscope, EC1, the latest demonstration of our ability to develop sustainable, technology enabled and service led buildings that offer excellent connectivity and are aligned with the latest ways of working." 

Operational Performance

Rent collection

-    We have collected 82.8% of the March 2021 quarter rents due to date and anticipate, through further cash receipts from agreed payment plans, to have collected between 91% and 95% by the end of June 2021.

-     We have now collected 92.9% of all rent contracted and payable for the March, June, September and December 2020 quarters. Of the balance, we have granted rent holidays on 4.9%, mainly to our F&B tenants, leaving 2.2% which is subject to ongoing discussions with tenants.

Lettings

-    At Kaleidoscope, EC1, we have completed the letting of the whole of the 88,581 sq ft office building to TikTok Information Technologies UK Limited on a 15 year lease term. The tenant has a break at year ten, and a market rent free period has been granted. The letting achieved an annual rent of £7.6m, reflecting a 5.4% premium to the 31 March 2020 ERV.

-       We completed a further four lettings across our London portfolio, totalling 5,179 sq ft, delivering contracted rent of £0.3m in line with the 31 March 2020 ERV. After the Period end, we completed a lease renewal with Stripe Payments at the Warehouse, extending the lease by three years. The renewal contributes an additional £0.1m to contracted rent and reflects a 4.7% premium to the 31 March 2020 ERV.

-     At Trinity, Manchester, we have let the third and fourth floors to Kennedys Law LLP, the two fifth floor units to Tosca Debt Capital LLP and Saffrey Champness LLP, and one of the ground floor retail units. These lettings total 24,113 sq ft and deliver £0.7m of contracted rent at a 4.1% premium to the 31 March 2020 ERV. The lettings take the building to 41% let, with a further floor and retail unit currently under offer, which would take it to 51% let.

Sales

-     In December 2020, we completed the sale of The Powerhouse Portfolio, comprising The Tootal Buildings, 35 Dale Street and Fourways in Manchester, to real estate funds managed by Pictet Alternative Advisors, S.A. and XLB Property Limited. The disposal price of £119m reflected a blended net initial yield of 5.2% on the contracted rent and a blended capital value of £329 psf.

-    At Barts Square, EC1, we completed the sale of one further apartment in Phase One, leaving just one apartment available for sale. In Phase Two, we completed the sale of five apartments and have exchanged contracts for the sale of a further apartment, leaving 27 apartments available for sale.

Developments

-    At 33 Charterhouse Street, EC1, our 205,369 sq ft office development in joint venture with AshbyCapital, construction work is continuing as planned, with the basement and core now complete and the steel frame progressed to level three. The development, which in 2020 was awarded the UK's first BREEAM 2018 New Construction "Outstanding" rating at the design stage, is due to achieve practical completion in September 2022.

Sustainability

-      In April 2021, we are publishing our "Designing for Net Zero" guide, produced to aid our professional teams as they collaborate with us to reduce carbon use in our development projects, from the design and construction process through to operation and occupation.

-     In March 2021, our £139.8m loan with Allianz financing the development of 33 Charterhouse Street, EC1, in joint venture with AshbyCapital, was designated a "Green Loan", receiving an "advanced" rating from its independent, third party verifiers.

-     During the Period, we improved our GRESB rating from 2* and 63/100 to 3* and 76/100. In addition, our CDP rating improved from C to A and our MSCI ESG score improved from AA to AAA.

Financing

At 31 March 2021, the Group held £82.1m of cash in short term deposits available to deploy without restrictions and a further £77.3m of sales proceeds and rent collected in bank accounts available to service payments under its loan agreements. In addition, the Group had £200m of undrawn loan and overdraft facilities.

At 31 March 2021, the Group had drawn £341m of its £531m of investment facilities. These borrowings have an average maturity of 3.3 years, which increases to 4.5 years on exercise of options to extend the £400m RCF, and a weighted average interest cost of 3.3%.

In our joint ventures, we had drawn £9.4m of the £69.9m (our share) facility with Allianz to develop 33 Charterhouse Street, EC1 and £11.6m (our share and fully drawn) with HSBC at Barts Square, EC1.

Notice of Results

The Group confirms that it will announce its full year results for the 12 months ended 31 March 2021 on Tuesday 25 May 2021. There will be a presentation for analysts on the morning of the results, for details of which please contact FTI Consulting.

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