Std. Life Invs.Property pledges 10% divi hike

19th Mar 2010 12:38

Last year may have been a bumper year for stock markets but property investor Standard Life Investments Property Income trust saw its net asset value per share decline, thanks largely to the fall in the valuation of the company's commercial property.The focus of the investment trust is income, however, and on that score it is doing well, yielding 6.5% at the end of 2009 when the special dividend of 0.25p is included.After paying 4p in normal dividends during 2009 the board has committed to increasing the dividend pay-out by 10% in 2010, starting with a 1.1p first quarter dividend.Net asset value per share (NAV) on an International Financial Reporting Standards (IFRS) basis was 57.6p at the end of 2009, compared to 62.7p at the end of 2008. The decline in the value of the property portfolio knocked 10.7p off the NAV.The value of the trust's total assets edged higher to £169.1m from £169m a year earlier. The cash balance declined to £30.8m at the end of the year from £44.5m at the end of 2008, and currently stands at around £25m.The loan to value percentage, calculated as bank borrowings (£84.4m) less full cash balance as a percentage of the open market value of the property portfolio as at 31 December 2009, increased to 39.2% from 32.4%, though stayed well within the trust's covenant level of 65%.The company purchased two properties for £21m (excluding purchase costs) at yields of 8.6% and 9.9% during the year.'The board remains confident that the company is in a strong position to enhance income returns for the benefit of shareholders by continuing to purchase attractively valued properties utilising the skills of its Investment Manager, Standard Life Investments,' said chairman David Moore. 'Should economic growth strengthen and confidence improve longer term, it is likely that the UK commercial property market will provide double digit returns over the next few years,' Moore added.