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Balanced Commercial Property boosts return, expects more disposals

2nd Feb 2024 09:50

(Alliance News) - Balanced Commercial Property Trust Ltd on Friday said net asset value declined in its latest quarter, although passing rent increased.

The London-based commercial property investment trust said NAV at December 31, the end of the fourth quarter, was 109.8 pence per share, down 3.6% from 113.9p at September 30.

Shares in Balanced Commercial were up 0.7% at 76.29p on Friday morning in London.

The trust recorded a negative 2.4% NAV total return for the quarter, an improvement on its negative 14% return for the prior year.

Balanced Commercial's portfolio recorded a 2.6% valuation decline over the period, while the value of its office assets declined by 5.4%. Retail warehouse asset value decreased 4.6%, and asset value for the St Christopher's Place Estate was down 1.5%, while industrial assets saw a capital fall of 0.9%.

The portfolio's net initial yield for December was 5.5%, compared with the 5.4% yield in September.

Balanced Commercial said it completed 12 occupational transactions resulting in portfolio passing rent increasing by 1.2%. These included the refurbishment of Strategic Park in Southampton, which drove passing rent up by 28%, and two lease renewals at the Cowdray Centre in Colchester. The full portfolio's vacancy rate "remained stable over the quarter" at 6.7%.

The trust's exposure to offices is down to 24.4%, following its sale announced in mid-January of three office holdings for GBP42.8 million in total.

"The manager is continuing to actively review a pipeline of further disposals from both the office and other sectors," Balanced Commercial commented, "targeting assets where value can be crystallised following the successful delivery of asset business plans."

This, it said, is "part of the company's strategy to enhance the portfolio's exposure to structurally supported growth sectors and assets."

By Emma Curzon, Alliance News reporter

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