26th Apr 2019 11:21
LONDON (Alliance News) - UK Commercial Property REIT Ltd said on Friday it posted a slight rise in net assets and its portfolio value in 2018, as it continued to reduce exposure to retail and move into industrial assets.
For 2018, the FTSE 250-listed property investor delivered a net asset value total return of 4.5%, through a portfolio total return of 5.9%, underperforming against the MSCI IPD benchmark index's return of 6.7%.
Although the portfolio outperformed against the benchmark in the first nine months of the year, it fell behind in the last quarter due to on-off transaction costs, the timing of asset management events in the industrial portfolio, and valuation adjustments in retail, the firm said.
Net asset value per share as at December 31 was 93.3 pence, up 0.5% from 92.8p the year before. UK Commercial's share price was 83.2p at the end of 2018, reflecting a widened discount to net asset value of 10.8%.
Shares in UK Commercial were down 0.7% on the day Friday at 87.60 pence, having improved since the year-end.
On July 1, UK Commercial completed its conversion into a real estate investment trust, which is expected to safeguard the trust from legislation changes that would have negatively affected returns.
The trust's portfolio value increased by 3.4% at the end of 2018 to GBP1.45 billion from GBP1.40 million the prior year, as UK Commercial sold off more of its assets in the weaker retail sector, and acquired industrial stock.
UK Commercial declared a total dividend of 3.68 pence per share, in line with the prior year.
"The company has continued to reduce its exposure to the retail sector and to sell out of ex-growth assets, recycling proceeds into opportunities with sustainable income characteristics whilst maintaining low gearing. As a result, an increasing percentage of portfolio income is subject to fixed uplifts, underpinning an attractive dividend yield and the potential for improving dividend cover," said Chair Andrew Wilson.
Related Shares:
UKCM.L