30th Jan 2020 09:56
(Alliance News) - UK Commercial Property REIT Ltd on Thursday said its net asset value declined in the fourth quarter of 2019 with a weak performance from retail assets.
The FTSE 250-listed real estate investment trust posted an NAV per share of 89.8 pence as at December 31, down 0.8% from 90.5p at the end of September and a 3.8% decline from 93.3p at the end of 2018.
The company's like-for-like portfolio capital value fell by 0.4% over the three months to December 31, dragged down by the performance of its retail assets. The overall capital performance, net of capital expenditure investment, was negative 0.5%. This was, however, better than its benchmark - the MSCI IPD monthly index - which fell 1.0% in the period.
Following disposals in the fourth quarter, UK Commercial Property's portfolio was valued at GBP1.38 billion on December 31, down 2.8% from GBP1.42 billion on September 30. Disposals included the REIT's only remaining shopping centre asset, located in Swindon, for GBP23.4 million and an office investment in Hemel Hempstead for GBP11.5 million.
"These strategic disposals provide the company with additional firepower for reinvestment into assets that offer more sustainable income, while also reducing exposure to assets that have greater future return risk," said UK Commercial Property.
The company secured GBP4.9 million per annum of headline rent in the quarter over 17 lettings, rent reviews, and lease renewals. This represents a 10% rise in prior rent and is 4% above estimated rental value.
UK Commercial Property is required to hold a continuation vote at a company meeting in 2020, and every seven years after that. It will publish a circular "in due course" to call an extraordinary meeting and will recommend shareholders vote to continue the company.
Chair Ken McCullagh said: "The office market and logistics sector, which the majority of [UK Commercial Property's] portfolio has been strategically aligned to, have continued to perform well, with favourable supply and demand dynamics in addition to a good occupational market underpinning growth.
"Together with the team's hands on asset management approach, the portfolio has delivered a robust quarterly performance, outperforming the MSCI IPD monthly index. Whilst the general election in December provided the market with greater political stability, our focus remains on active asset management to drive income and on targeting investment opportunities with durable income prospects. With our strong balance sheet, we are well placed to act."
Shares in UK Commercial Property were up 0.5% at 86.50 pence in London on Thursday morning.
By Anna Farley; [email protected]
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