LONDON (ShareCast) - (Sharecast News) - Helical said on Thursday that it has collected 77.3% of the June quarter rent, with agreements in place for a further 13.6% to be paid in instalments in the period leading up to the September quarter day.
The London-listed firm said it had granted rent free periods on 4.7% of its rent roll, mainly for food and beverage tenants.

As a result, the board was expecting that by the end of the June quarter, it would have collected between 90.9% and 95.3% of all contracted rent.

It said that in its 50-50 joint venture with AshbyCapital, it had exercised the option under the development agreement with the City of London Corporation to secure a new 150-year lease at 33 Charterhouse Street, with the 200,000 square foot office development targeted to complete in summer 2022.

On 28 April, it completed the sale of 90 Bartholomew Close, London 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%.

At phase one of Barts Square, London EC1, the company completed the sale of 140 apartments, and of the remaining four apartments, three had either exchanged or were under offer, leaving one available.

Helical said that at phase two, completion had been achieved on 51 apartments, with a further six apartments either exchanged or under offer, including 56 West Smithfield, leaving 35 apartments available.

In Manchester, the firm said the refurbishment of the Fourways reception and atrium had now been "substantially" completed, providing new feature link bridges between the office floors, and modernising the reception.

On the financial front, Helical said it secured a £140m debt facility from Allianz to finance the development of 33 Charterhouse Street.

The facility has a four-year term, with the option to extend to a fifth year, and the board expecting the first drawdown to be in the third quarter, from which point all future development costs would be fully funded by the facility.

As at 22 July, the group had £67m of available cash, £531m of investment facilities of which £360m was drawn down, and £88m of development facilities of which £11m was drawn down.

As a result of the "strong" June quarter rent collection, the group said it still had "substantial" headroom on all of its covenants.

"Today's trading update is issued against a background of growing optimism that the immediate health threat presented by Covid-19 is receding, permitting the continued re-opening of the UK economy," said chief executive officer Gerald Kaye.

"With city centre retailers and food and beverage operators now open, it is vitally important to the economies of the cities in which we operate, London and Manchester, as well as across the country, that businesses act on the government's encouragement to return to their offices to work.

"This will generate considerable and much needed economic activity with a positive knock on effect across a range of sectors."

Kaye said that across the company's portfolio, it was seeing a number of occupiers return, with others making plans to do so after the summer.

"We continue to support our tenants and are beginning to see a recovery in the letting market, evidenced by some encouraging discussions on the vacant space in our portfolio.

"We believe that the attraction of our high-quality portfolio of new or recently refurbished grade A offices will endure with businesses continuing to seek well-located and accessible properties, which incorporate the latest in sustainable building design, offer state of the art technology and have occupier health and well-being at their core."

At 1525 BST, shares in Helical were up 3.25% at 318p.

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