UK Commercial Property Trust (UKCPT) was launched in September 2006, registered as a Guernsey investment company and has a full listing on the London Stock Exchange (FTSE 250).
The initial offering raised £530m and the proceeds were used to acquire a portfolio of properties from closed life funds held by Phoenix Group Holdings. This provided a means for the life funds to collectivise their property exposure, while at the same time reducing exposure by way of UKCPT attracting additional new shareholders.
Similar exercises were undertaken in February 2007 and October 2009, whereby separate property portfolios were purchased from Phoenix life funds. These transactions were financed by further share issues of £360m and £111m respectively and in the case of the latter, in conjunction with the partial drawdown of a £80m Lloyds Group plc debt facility secured in June 2008.
In January 2010, a further £150m shares were issued to finance further dividend accretive acquisitions and portfolio initiatives. Further share issuance took place throughout 2014.
In April 2015, UKCPT agreed a twelve year £100m debt facility provided by Cornerstone Real Estate Advisers Europe LLP on attractive terms. This was used to refinance the £80m Lloyds facility due to expire in June 2015. In addition the 2018 £150m Barclays loan facility was extended out to 2020 and the margin on this loan was reduced. These two refinancings resulted in the Company’s blended average interest rate falling from 3.85% per annum to 2.89% per annum, the lowest in the Company’s peer group. In addition, the Company also secured a £50million Revolving Credit Facility from Barclays to provide additional resource and allow the Investment Manager to target further attractive investment opportunities.
Since launch, UKCPT has adopted a conservative approach to gearing (the lowest in its immediate peer group), which has helped preserve value in difficult market conditions and ensured an attractive share price total return relative to the FTSE All Share REIT Index. The current maximum gearing limit is 25%.
At the same time, UKCPT has maintained a strong bias towards prime, institutional quality properties which is consistent with its life company heritage. This portfolio continues to support an attractive yield for shareholders.
The current portfolio is in excess of £1.2bn, and comprises 43 properties, diversified by location and sector across the UK*.
UKCPT has successfully completed a range of asset management initiatives across the portfolio and has consistently delivered an attractive return for shareholders underpinned by a consistent income return.
The net asset value has outperformed its IPD benchmark since launch*.
*Source: Internal at 31 March 2016.