Balanced Commercial Property Trust (BCPT) is a generalist real estate investment trust (Reit). This is another way of saying that it doesn't own one type of asset class, in the way Segro (SGRO) owns warehouses and Hammerson (HMSO) owns shopping centres, but a variety.
- Short-term momentum
- Trading on a hefty discount
- Diverse mix of assets
- Strong rental income growth
- Mistimed office sales
- Disappointing track record
In fact, BCPT’s mix of assets almost mirrors the 'average' Reit portfolio, based on the holdings of the 35 largest Reits weighted by market cap. As such, it is a pretty good barometer for UK real estate as a whole. In good times, such as between 2009 and 2018, its share price has performed well. However, things took a serious turn for the worse this decade as first Covid-19 and then high interest rates hit the UK. Like many Reits, BCPT is now trading at a hefty discount to net asset value, which reflects the lower returns expected by investors.