Asset management drives resilient performance for UK Commercial Property Trust
UK Commercial Property Trust, the largest UK focused commercial property trust, saw a fall in NAV per share to 72.3p as at 30 June 2012 (31 December 2011 – 75.5p) mainly caused by 2.4 per cent like-for-like decline in value of property portfolio.
The share price meanwhile saw total return of 5.9 per cent in the period.
Over five years NAV and share price total return have exceed the IPD benchmark and FTSE Real Estate Investment Trusts Index.
UK Commercial Property Trust currently enjoys the lowest gearing in the company’s peer group at 18.5 per cent and a blended average debt rate of 4 per cent. An attractive annual dividend yield of 7.4 per cent is based on period end share price.
During the period UK Commercial Property Trust purchased three multi-let industrial park assets for GBP60.5m reflecting a yield on cost of 7.7 per cent and a total income of GBP4.7m per annum.
The company also saw additional annual rental income of GBP1.3m generated through 20 new lettings in the portfolio over the period with an average lease length of nine years and 10 months, and 21 rent reviews settled during the period providing an additional GBP234,000 of rent.
Several successful asset management initiatives have been undertaken during the period including:
Resolution to grant planning consent for GBP150m Riverside redevelopment in Shrewsbury along with pre-let agreement signed with Debenhams plc for new 95,000 sq ft anchor department store;
New 15 year lease with existing tenant Next at the Kew Retail Park, Richmond which will increase income from the unit by approximately GBP90,000 per annum and the asset valuation by approximately two per cent;
Opening of new Cattle Grid restaurant at Rotunda, Kingston upon Thames added GBP500,000 to valuation of property due to ERV uplift in a unit that was previously void;
New unit completed for Pizza Express at Junction 27, Leeds generating GBP160,000 rent per annum and contributing GBP1 million of added value to the property.
Chris Hill, chairman of UKCPT, says: “Our results for the first half of the year represent a resilient performance in an economic environment that continues to present challenges. We have grown the size of the portfolio through targeted acquisitions, and have already had successes in increasing the income from these assets. We continue to focus on maximising income from the portfolio to support our attractive dividend yield, and have sufficient headroom in our debt facilities to allow us to make further acquisitions where we see good quality assets with potential for value growth through asset management.”
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