UKCPT profit and net asset values slide

Kasmira Jefford
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UK COMMERCIAL Property Trust, the largest UK-focused trust of its kind, has announced a slight decline in its net asset value per share in the first half of 2011 to 76.9p, from 77p in the previous six months, as a slow economic recovery continued to take its toll.

In its half-year results the trust said that the value of its property portfolio increased by 1.4 per cent to £1.014bn, delivering a total net asset value return of 3.3 per cent.

Total income for the half year slumped to £39.66m from £64.4m a year ago, offset in part by fourteen new lettings in the period creating £1.4m of annualised income.

Chairman Chris Hill said despite ongoing challenges in the macroeconomic environment, the trust remained positive about the long-term outlook for commercial property, helped by demand from overseas investors for prime and London properties.

“With the new debt facility now in place, the company is well positioned to enhance its income and capital returns through selective acquisitions and asset management initiatives,” he said.

UKCPT made two acquisitions in the first half – the St. George’s Retail Park in Leicester for £49.9m and the Rotunda Leisure Complex in Kingston upon Thames.

“These two prime properties add over £6m of annualised revenue and also present us with further opportunities to enhance returns through asset management, typifying the type of acquisitions we are currently seeking,” said Hill.

The group also reduced its void rate excluding pre-lets at June to 3.6 per cent compared to industry average of 8.6 per cent.

It has also secured a fresh £150m borrowing facility, taking its gearing up to 10.2 per cent.

Shares in the firm, which tried unsuccessfully to merge with a branch of F&C’s property operations last summer, closed up 1.58 per cent at 80.25p yesterday.