28th Sep 2016 10:25
LONDON (Alliance News) - F&C UK Real Estate Investments Ltd on Wednesday noted the mixed market sentiment and weakening values in the UK commercial property market resulting from the UK's vote to leave the European Union.
The trust said that industrial properties and offices outperformed retail and London outperformed all other regions in the UK in its financial year ended June 30, but cited increased uncertainty in the capital markets towards the end of that period.
"There has been market uncertainty and evidence of a pricing adjustment in the immediate aftermath of the Brexit vote, although this does appear to be moderating as transactional evidence to support pricing improves," the trust said.
F&C UK Real Estate noted market indicators which have suggested some weakening of values since the end of June 2016, such as the IPD Monthly Index pointing to capital falls of 2.8% and 0.7% over July and August, respectively.
Over the year to June 30, F&C UK Real Estate said its net asset value total return was 7.5%, with a net asset value at the year-end of 99.20 pence, ahead of the 97.00p reported a year earlier.
Meanwhile the UK commercial property market delivered a total return of 9.1% as measured by the Investment Property Databank UK Quarterly Index.
The trust said its property portfolio produced an ungeared total return of 7.1% over the year, which it said was driven by an income return of 5.6%, above the 4.7% income return derived from the IPD UK Quarterly Index.
F&C UK Real Estate said it was cautious in its approach to the deployment of capital over the year, evidenced by the fact there were only three sales and no purchases over the year.
The trust declared a final dividend of 1.25 pence per share, giving a total dividend of 5.00p per share, in line with the prior year.
Shares in F&C UK Real Estate were down 0.3% at 95.74p on Wednesday morning.
By Hannah Boland; [email protected]; @Hannaheboland
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