UK Commercial Property Trust has one of the lowest levels of debt among UK property investment trusts, and one of the stronger records in terms of returns. Perhaps even more importantly, last year the trust secured a £150m seven-year borrowing facility, which sets it apart from many other property trusts which are going to have to renew their debt facilities in the near future. The trust's managers say the new facility will enable the fund to make quick and strategic acquisitions while maintaining the lowest level of debt in its peer group.
The level of vacant spaces in the trust's properties at the end of the third quarter of 2011, at 3.5 per cent, is also well below the industry average - even though it is quite highly exposed to retail warehouses and high streets.
The trust offers an attractive yield of more than 7.5 per cent ahead of inflation, but can still be bought at a discount to net asset value (NAV) of nearly 9 per cent. This is much wider than the trust's 12-month average (a premium of 1.83 per cent) and the discounts (and in some cases premiums) on UK equity income investment trusts generally.
The fund's yield is one of the lowest in its peer group, but that's partly because the trust targets both capital and income growth. Even with an income investment, total return is important – there is no point having a high yield if you are losing substantial amounts of capital.
The trust has experienced managers at Ignis Asset Management who have managed commercial property for a number of years.
UK COMMERCIAL PROPERTY TRUST (GB00B19Z2J52) | |||
| PRICE | 69.25p | GEARING | 111% |
| AIC SECTOR | Property direct UK | NAV | 75.9p |
| FUND TYPE | Guernsey investment company | PRICE DISCOUNT TO NAV | -8.83% |
| MARKET CAP | £857.86m | 1-YEAR PRICE PERFORMANCE | -10.39% |
| NO OF HOLDINGS: | 41* | 3-YEAR ANNUALISED PRICE PERFORMANCE | 15.63% |
| SET-UP DATE | 20-Sep-06 | 5-YEAR ANNUALISED PRICE PERFORMANCE | -1.31% |
| TOTAL EXPENSE RATIO | 1.36% | MORE DETAILS | www.ignisasset.com/propertytrust/ |
YIELD | 7.58% | ||
Source: Morningstar, * Ignis Asset Management.
Performance data as at 6 January 2012.
TOP TEN HOLDINGS (as at 30 September 2011)
| The Parade, Swindon | 6.6 |
| Junction 27 Retail Park, Birstall, Leeds | 5.9 |
| Great Lodge Retail Park, Tunbridge Wells | 5.7 |
| 176/206 Kensington High Street, London | 5.3 |
| St George's Retail Park, Leicester | 5 |
| The Rotunda, Kingston upon Thames, London | 4.9 |
| Kew Retail Park, Richmond | 4.4 |
| Darwin Shopping Centre, Shrewsbury | 4.1 |
| Sovereign Centre, Weston-super-Mare | 3.6 |
| 15 Great Marlborough Street, London | 3.6 |
SUB-SECTOR BREAKDOWN
| Retail warehouses | 25.9 |
| Shopping centres | 16.6 |
| Offices – rest of UK | 10.8 |
| Retail – south-east | 9.2 |
| Offices – West End | 8.8 |
| Industrial – south-east | 8.8 |
| Offices – south-east | 6.2 |
| Leisure | 4.9 |
| Industrial – rest of UK | 4.6 |
| Retail – rest of UK | 4.2 |
