UK Commercial hails resilient performance

20th Mar 2012 07:09

Guernsey-based property firm UK Commercial Property Trust said its property portfolio continues to perform in line with the board term's strategic positioning and has proven resilient in tough economic times.The commercial property firm saw its net asset value (NAV) per share ease at the end of 2011 to 75.5p, down from 77.0p a year earlier, but with a dividend yield (as at the end of 2011) of 7.6%, the company could boast of a total return to shareholders over the year of 4.9%. The 2011 dividend has been maintained at 5.25p. "The company's NAV total return for the year was 4.9%, which was below that of the IPD [Investment Property Databank] Benchmark total return of 7.8% but greater than that of the FTSE Real Estate Investment Trusts Index (-10.6%) and the FTSE All-Share Index (-3.5%)," noted Christopher Hill, the trust's Chairman.The trust's property portfolio achieved an increase of 1.0% in the year. However, this increase was partly offset by transaction costs on property acquisitions, changes in swap valuations and working capital movements.As was the case in 2010, offices were the top performing sector in 2011 within the wider market, with strong demand in London contrasting with weaker markets throughout the rest of the country. "However, as the year ended, it was evident that the impact of the Eurozone debt crisis was affecting investor sentiment towards the City: it is becoming evident that, in the short term at least, rental growth is slowing. Conversely, [London's] West End rents continued to improve, primarily due to a lack of supply rather than any resurgence in occupational demand," observed Robert Boag, Senior Investment Director of Ignis Investment Services, the trust's investment manager.UK Commercial's performance in the office sector was in line with the industry benchmark in terms of total return (8.9%), and comfortably outperformed the industry in the Industrials Sector (total return of 8.9% versus 7.3%0. The Retail portfolio's total return of 6.9% was marginally below the benchmark return of 7.0%.Rental income for 2011 rose to £69.8m from £60.2m the year before. Gains on investment properties in 2011 fell dramatically, however, from £45.3m in 2010 to £5.1m in 2011. As a result, total income slipped to £74.1m from £106.1m the year before. Profit before tax tumbled to £53.0m from £91.6m in 2010. Earnings per share retreated to 4.43p from 7.83p. The shares fell 0.45p to 71.25p following the release of the figures. jh