17 December 2021

Circle Property Plc

("Circle", the "Company" or the "Group")

Completion of Disposal of One Castle Park, Bristol and Disposal of 141 Moorgate

Further to the announcement dated 1 September 2021, Circle Property Plc (AIM: CRC), which invests in, develops and actively manages well-located regional office assets, announces that it has completed the sale of One Castle Park, Bristol for £20 million (the "Disposal").

The sale price of £20 million represented a 3.9% increase on the 31 March 2021 valuation of £19.25 million. The investment property was acquired by the Company in November 2012 for £4.165 million. 

The Company has a financing facility in place with RBS and HSBC for £100 million comprising a senior revolving facility for £65 million (of which the Company has drawn £58.544 million) with an "accordion" option for a further £35 million (the "Facility").

In line with the Board's commitment to reduce the Company's gearing, £18 million of the sale proceeds from the Disposal will be used to repay a proportion of the Facility. Following this repayment, the Group's LTV will reduce to 36.9% (excluding cash at bank) with a Group cash balance of £7.6 million, reflecting a net LTV of 29.9%. The total amount drawn down under the Facility will reduce to £40.544 million.

In addition, the Company is pleased to announce that it has exchanged contracts to sell 141 Moorgate, London to Moorgate (141) Properties Ltd. The total sale price of approximately £7.1 million (of which 51.04% is due to the Company as head lessee) represents a 27.3% increase on the 30 September 2021 valuation of £2.85 million (the valuation of the Company's 51.04% interest). The cash proceeds from the sale due to the Company of £3.6 million will, on completion, be utilised to reduce the Company's gearing.

John Arnold, Chief Executive of Circle Property Plc, said:

"The disposal of One Castle Park allows the Company to significantly reduce its loan-to-value in accordance with our previously stated objective and the £0.75 million gain over the 31 March 2021 valuation, makes a sizeable contribution to this year's profit, with the sale of 141 Moorgate contributing a similar amount over the 30 September 2021 valuation."

About Circle Property Plc

Circle focusses on acquiring assets in regional cities, many of which have significant office supply constraints, and on office assets with active management potential (refurbishment opportunities, under-rented or vacant properties or short leases), rather than just maximising initial rental yields.

Circle is not a Real Estate Investment Trust (REIT) and can actively recycle proceeds from asset sales into its refurbishment and redevelopment pipeline, as well as future investment opportunities, therefore targeting a broader range of returns for shareholders, which are primarily driven by NAV growth.

As well as already delivering substantial increases in NAV, the Company's portfolio has significant reversionary potential with current total estimated rental values of £10.92 million per annum, compared to contracted rent of £8.70 million at 31 March 2021. The Company has a portfolio of 10 regional commercial property investment and development assets in the UK valued at £110 million as at the date of this announcement (using 30 September 2021 valuations).