29th Apr 2014 11:24
LONDON (Alliance News) - UK Commercial Property Trust Ltd Tuesday said its net asset value increased by 2.2% over the first-quarter, rising to 74.7 pence from 73.1 pence, adding that its manager's latest forecast for total returns in 2014 stands at 15.5%, driven by an acceleration of capital value growth, supplemented by a slightly lower level of income return.
In a statement covering the three months ended March 31, the trust said the portfolio value was GBP1.08 billion, representing a like-for-like increase of 2.2% in the quarter before capital expenditure.
"Capital value growth continues to be driven in the main by yield compression. Over the medium term, these forecasts suggest that all major sectors generate capital value growth over a three-year horizon pushing the all property total return average to 10.7% per annum. The rates of capital growth will be front-loaded as the impact of yield compression is expected to be greatest in 2014,"the trust said in a statement.
"The manager's latest All-Property rental value forecast in respect of 2014 shows a modest improvement to 2.3% . It also suggests that growth will accelerate to 3.4% per annum over the period 2014-18. This increase is in line with the anticipated expansion in output growth across the broader economy, which is expected to continue into the medium term," the trust added.
The trust said it intends to declare a first interim dividend of 0.92 pence a share.
The trust said it is aiming to issue over the coming months its 41.4 million shares currently held in treasury in response to market demand at an "acceptable" premium to the net asset value.
"The NAV growth in the first quarter of the year reflects the successful work undertaken by our asset management team and the continuing improvement of sentiment in the UK commercial real estate market. Recent acquisitions have increased the company's exposure to the industrial sector which we believe offers excellent risk adjusted income and potential for valuation growth, while letting activity has mitigated challenging conditions in our retail portfolio," Chairman Christopher Hill said in a statement.
"The company, with its high quality portfolio of properties across the country, is well positioned to benefit from the positive current environment and we look forward with cautious optimism," Hill added.
The trust said it will continue to monitor the situation relating to the sale of its manager, Ignis Investment Services, to Standard Life PLC by Phoenix Group Holdings.
Shares in the trust were down 1.6% to 81.25 pence midday Tuesday.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Phoenix Group HoldingsUKCM.LSL..L