2nd Jun 2020 08:36
(Alliance News) - UK Commercial Property REIT Ltd on Tuesday reported a decrease in net asset value and the value of its portfolio in 2019, as a strong performance in the industrial retail sector continued to be limited by the structurally challenged retail sector.
For the year, the FTSE 250 real estate investment trust delivered a net asset value total return of 0.1%, and a portfolio total return of 1.4%, underperforming against the MSCI IPD benchmark index's return of 1.8%.
The underperformance was caused by polarising results within UK Commercial's portfolio, as the Industrial sector - which makes up 51% of the total portfolio - continued to make positive returns with rental value growth and strong pricing.
However, the retail sector - which makes up 21% of the portfolio - had a difficult year, with retail warehouses, and regional shops losing their value, with only supermarkets and central London shops remaining stable, supported by long index lined leases.
Net asset value per share as at December 31 was 89.8 pence, down 3.7% from 93.3p the same date the year before. UK Commercial's share price was 88.8p at the end of 2019, reflecting a narrowed discount to net asset value of 1.1%.
Shares in UK Commercial Property Trust were up 0.6% at 60.06 pence on Tuesday in London.
The trust's portfolio value as at December 31 fell by 4.8% year-on-year to GBP1.38 billion from GBP1.45 billion the same date the year before.
UK Commercial declared a total dividend of 3.68 pence per share, in line with the prior year.
"My first full year results announcement as Chair of UKCM comes against the backdrop of an unprecedented global pandemic in Covid-19. As well as the tragic human cost of this virus, the economic implications have been profound and will impact all sectors of the economy for the foreseeable future, with the hope that significant government support and stimulus packages will see a return to growth," said Chair Ken McCullagh.
"Looking ahead, the current crisis has resulted in significant pressure on the company's revenue account with rent collections for the second quarter standing at 68% as at 24 April 2020. However, we believe that UKCM continues to have strong fundamentals in place both at a property and
corporate level that will help the company navigate these unique circumstances, giving us the confidence to have announced in April that we intend to continue paying a dividend to shareholders," McCullagh added.
By Dayo Laniyan; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
UKCM.L