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  • The trust aims to deliver an attractive level of income together with the potential for income and capital growth from investment in a diversified UK commercial property portfolio. It offers investors prime exposure to commercial property assets.

  • How to Invest

    Open an F&C Savings Plan

    Call: 0800 136 420

    Invest online now

    Or contact your usual investment broker

  • Share Price

    94.00p-0.50p

    closed

Key facts

  • Key points

    This trust offers exposure to a diverse portfolio of UK commercial property and a high level of income is paid quarterly. Investors can gain exposure to an asset class that is usually not accessible, via a readily realisable vehicle.

    Fund facts
    Investment manager F&C Investment Business Limited
    Launch date 1 June 2004
    Total assets £352.99 million (as at 31.03.16)
    Currency Sterling
    ISIN GB00B012T521
    SEDOL B012T52
    Key dates
    Annual general meeting  
    Year end 30 June
    Dividend payment date(s) March, June, September and December
  • Fund manager commentary

    Total returns for All-property as measured by the Investment Property Databank (‘IPD’) Quarterly Universe were 1.1% in the three months to March 2016, a marked slowdown from the 3% seen in the last quarter of 2015. Underlying performance remains solid, however capital values were 0.1% lower at the end of the period, predominantly as a consequence of the impact of the Government’s decision to increase stamp duty rates from March for larger commercial properties within England and Wales. Capital values are now 5.9% up on this time last year.

    All sectors and geographies recorded lower total returns compared to Q4 2015, but with London and the South East continuing to outperform the rest of the UK. Central London and South East Office markets were the best performing subgroups, alongside Industrials. Yields are now holding steady but with selected subsectors trending slightly weaker on sentiment, with discussions surrounding a possible ‘Brexit’ scenario being a contributing factor to more modest transactional volumes. Rental growth continues to broaden beyond the core London markets, but with the overall rate of growth falling marginally over the quarter.

    Over the quarter the Company’s portfolio returned 0.8%, with total returns over the twelve months of 9.7%. The portfolio has returned an attractive, above market level of income growth, with an income return for the year to March of 5.5%. The portfolio benefits from defensive income characteristics, with an average weighted unexpired lease term of 7.1 years and the largest ten tenants by rent, all rated as negligible or low risk by IPD, accounting for 43% of total income. The vacancy rate for the portfolio at March 2016 was 4.8% of annual rent receivable. Approximately half of this void will be addressed by the letting of the Companies’ vacant Industrial property at Chippenham Drive, Milton Keynes, which is currently subject to refurbishment.

    UK Property retains a healthy margin above gilts and while this is undoubtedly attractive given continued low interest rates, we see limited scope for further yield compression at current pricing. Despite actual and forecast rental growth across all sectors, we expect to see an easing in total returns following three years of double digit performance. Property continues to offer an attractive income return, and it is the quality and longevity of this income, supported by the ability to generate income growth at the asset level that will be the key to performance moving forward.

    In accordance with the strategy to address the tail of smaller, more secondary assets within the portfolio, two properties (5 Newcombe Drive, Swindon and 25 Northbrook Street, Newbury) were sold over the quarter. With an improved cash position and recently completed refinancing exercise, the Manager remains vigilant for suitable acquisition opportunities to satisfy the Company objective.

    As at 31 March 2016

  • The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market movements. Past performance is not a guide to future performance. When you sell your shares, you might get back less than you originally invested. If markets fall, gearing can magnify the negative impact on performance. A fund investing in a specific country carries a greater risk than a fund diversified across a range of countries. The value of property related securities are likely to reflect valuations determined by professional valuers. Such valuations are the opinion of valuers at a particular point in time and are likely to be revised. Property and property related assets can sometimes be illiquid.
  •  

  • Peter Lowe

    Peter Lowe

    Fund Manager

Past performance is not a guide to future results. The value of investments can go down as well as up.

Information in this section of the Website is directed solely at persons who are located in the UK and can be categorised as retail clients. Nothing on this website is, or is intended to be, an offer, advice, or an invitation, to buy or sell any investments. Please read our full terms and conditions before proceeding further with any investment product referred to on this website. This website is not suitable for everyone, and if you are at all unsure whether an investment product referenced on this website will meet your individual needs, please seek advice before proceeding further with such product.

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