Uk Commercial Property R... Share Discussion Threads

[speedsgh] 31/10/2019 12:01

Net Asset Value at 30 September 2019 -

Net Asset Value

NAV per share of 90.5p (30 June 2019: 93.2p), resulting in a NAV total return of -1.9% for the quarter with continued low net gearing of 17.0%*.

Like-for-like portfolio capital value decreased by -2.1% with overall capital performance net of capital expenditure investment of -2.2%. This was driven by further valuation pressure in the retail sector and, in particular, the Company’s only shopping centre, which is in Swindon but has now been contracted for sale. This compares to a -0.7% fall in the MSCI IPD monthly index over the period. After the disposal of Manchester in the quarter, the portfolio is now valued at £1,419 million (30 June 2019: £1,459 million).

The passing rent at 30 September 2019 was £66.2 million compared to an ERV of £80.2 million demonstrating the reversionary nature of the portfolio. In addition, over the last 12 months, 99% of the Company’s rent roll continues to be collected within 21 days.

With close to a 50% exposure, the Company’s current, strategic overweight position to the industrial /logistics sector, with a bias towards urban stock and the south-east, continues to provide a positive contribution to returns and contains the majority of the Company’s reversionary potential. In the office sector, where the Company has a 16.5% exposure with approximately two thirds outside London, capital value has remained resilient whilst tenant leasing enquiries in the relatively small 7% vacancy have picked up over the quarter...

Andrew Wilson, Chair of UKCM, commented: “Significant further progress has been made to the Company’s ongoing strategy of reducing its exposure to retail. The sale of two retail assets has further reduced the Company’s weighting to this sector which is already significantly below that of the benchmark. The portfolio also remains highly reversionary as evidenced by the leasing activity undertaken during the period which locked in some of the rental growth that we expect to be a key driver of future income and shareholder returns. I am also delighted that Chris Fry has accepted an invitation to join the Board from January next year. He brings with him a wealth of property expertise and experience which I am sure will be invaluable to the Company in the future.”

Will Fulton, Lead Manager of UKCM at Aberdeen Standard Investments, said: “We took the opportunity to capitalise on good investor interest ahead of a potential lease break to sell our High Street retail asset in central Manchester. We were also pleased to make further progress towards reducing our exposure to retail after the period end, when we signed an agreement to sell The Parade in Swindon, our only remaining shopping centre, to an investor with a different return and risk profile. Around half of the portfolio is now weighted towards the industrial and logistics sector of which more than half is of an urban nature – a sub-sector where we continue to see strong interest and rental prospects. Looking ahead, we will continue to assess further opportunities to recycle capital through strategic disposals whilst making investments to grow the portfolio.”

[speedsgh] 14/2/2019 10:45

~ NAV down 1.1% to 93.3p (30/9/18: 94.3p)
~ Seeking to amend investment policy to allow investment in alternative property sectors (healthcare, student housing, hotels, car parks, pubs, petroleum and automotive and the commercially-managed private rental residential sector).

Net Asset Value at 31 December 2018 and proposed extension of investment policy -

[speedsgh] 24/10/2018 10:17

Some recent transactions...

Acquisition of M8 Industrial Estate for £24.6m (19/9) -

Sale of London office asset for £73.2 million (8/10) -

Sale of retail high street asset for £23.5 million (24/10) -

[speedsgh] 27/9/2018 15:12

UK Commercial Property REIT moves focus -

IC VIEW
With a decent dividend and trading at a discount to net asset value, the shares look attractive. And gearing is one of the lowest in the sector. Buy

[speedsgh] 27/9/2018 15:11

Half Year Results (20/9) -

Financial Highlights

~ NAV total return of 3.9% – robust return, driven by capital value growth and achieved with limited gearing of 11.9% which is still one of the lowest in the Company’s peer group and in the wider REIT sector.
~ Share price total return of 1.4% which compares favourably to FTSE All-Share REIT Index total return of 1.3%. Since inception the Company’s shares have delivered a total return of 74.9% compared to the REIT Index total return of minus 3.1%.
~ Attractive dividend yield of 4.2% compares favourably to the FTSE All-Share REIT Index yield (3.9%) and the FTSE All-Share Index yield (3.6%) as at 30 June 2018.
~ Uncommitted cash resources of £80m available for investment at period end including £50million available from Company’s revolving credit facility.
~ Overall the Company continues to have a strong balance sheet with considerable financial resources still available for investment.

Property Highlights

~ Portfolio value has grown to £1.4billion due to strong capital performance, income accretive acquisitions and successful asset management initiatives.
~ Continued outperformance from the portfolio which generated a total return of 4.7% v IPD benchmark return of 4.0%. Outperformance driven by above benchmark exposure to Industrial sector, asset management and good performance from Office portfolio.
~ Occupancy increased to 93% with half the remaining vacancy in strong locations within the industrial sector, which has good prospects to enhance future income and capital returns and further increase occupancy. Less than 20% of the vacancy is in the retail sector.
~ A total of £4.1 million of annual income was secured through 5 new lettings, after rent free periods and incentives, and eight lease renewals/rent reviews.
~ 99% of rent collected within 21 days underlining strength of tenant base.
~ Portfolio yield of 4.1% with reversionary yield of 5.3% highlighting potential for earnings growth.

Commenting on the results, Andrew Wilson, Chairman of UKCP REIT, said:

“Our strategy to grow and recycle capital into a diverse commercial portfolio producing sustainable, high quality rental income has continued to yield sound results in what has been another active period for the Company. The successful conversion to a REIT at the start of July is an important milestone for the business, making it one of the larger diversified REITs in the sector. With a high quality portfolio of assets located throughout the UK, a strong balance sheet and the lowest gearing amongst the Company’s peer group, UKCP REIT is well positioned to add value to its property portfolio and enhance returns for its shareholders.”

Will Fulton, UKCP REIT Fund Manager added:

“Successful property and financial management of the business to grow long term income and create shareholder value has been key to the Company’s continued positive performance during the period. Tenant occupancy across the portfolio remains high and we are confident that through active asset management we can grow income further, including through leasing progress on the small amount of unlet accommodation that remains. In addition to investment disposals, principally in the retail sector, the Company has also been actively pursuing a pipeline of attractive investment opportunities. The acquisition of an office in Reading, and, in August, of an estate near Glasgow, where we further increased our majority weighting towards Industrials, both demonstrate our ability to recycle capital into high quality assets that are well positioned to deliver growing and sustainable income.”

[speedsgh] 04/9/2018 13:39

Latest Edison research note...

Making steady progress in uncertain times -

UK Commercial Property REIT (UKCM) achieved a 10.6% NAV total return over the year to the end of June 2018, but its share price has lagged its steadily rising NAV and its discount has widened to 5.2%, among the widest in its UK direct property peer group. In July 2018, UKCM became a UK REIT to mitigate the risk of significant potential tax charges falling due from 2020 and agreed a reduced management fee, effective January 2019.

UKCM is significantly overweight in the industrial sector, which is expected to continue to lead market performance, while exposure to the weaker retail sector has been reduced. The manager sees considerable scope for near- and medium-term earnings improvement from the portfolio’s reversionary potential, which implies c 26% upside to rental income if market rates are achieved across all property assets...

[2wild] 02/7/2018 15:21

Sold most of my UKCP today at a nice profit. Have reinvested in RGL at over twice the dividend yield of 8.4%, which is also rising and fully covered by earnings.

[speedsgh] 29/5/2018 13:29

Conversion to a UK REIT has been approved at today's EGM. Conversion likely to take place on 1/7/18. Company name will change to UK Commercial Property REIT Limited...

RESULTS OF EXTRAORDINARY GENERAL MEETING -

At the Extraordinary General Meeting of the Company held earlier today the
following special resolution in relation the Company's entry into the REIT
regime was passed.

THAT, with effect from the Company entering into the UK REIT regime (expected to be effective on 1 July 2018 or as soon thereafter) pursuant to the terms of the notice given to HM Revenue & Customs in accordance with Part 12 of the Corporation Tax Act 2010: (i) the articles of incorporation produced to the meeting and initialled by the Chairman of the meeting for the purposes of identification containing amendments required for the purposes of the Company's entry into the REIT regime be adopted as the articles of incorporation in substitution for and to the exclusion of all existing articles of incorporation; and (ii) the name of the Company be changed to UK Commercial Property REIT Limited.

[speedsgh] 16/11/2017 20:23

Acquisition -

UK Commercial Property Trust Limited ("UKCPT" or the "Company") (FTSE 250, LSE: UKCM), which is advised by Standard Life Investments and owns a diversified portfolio of high quality income-producing UK commercial property, announces that it has made its first acquisition in the hotel sub-sector having contracted to forward fund the development of a 265 bedroom four-star Maldron Hotel in Newcastle city centre for £32 million, net of finance. The development, which includes an ancillary retail unit, has been pre-let on a long lease to the Dalata Hotel Group Plc ("Dalata") and is expected to deliver a yield on cost of 5.4%. The deal is structured through an initial upfront payment and interim funding which attracts finance interest at 5% during the construction period, followed by a balancing payment on completion.

Dalata, Ireland's largest hotel operator and an attractive tenant covenant, has agreed a 35 year lease with five yearly, annually compounded, RPI-linked upward only rent reviews with a cap and collar of 0.5% to 3.5% and no break options.

The hotel, Dalata's ninth in the UK, will operate under its flagship Maldron brand and is due to complete in the first quarter of 2019, generating an initial passing rent of £1,590,000 per annum. The total scheme, including the retail unit, is expected to generate an initial passing rent of £1,740,000. As a result of this acquisition, the proportion of RPI-linked and long-dated income in UKCPT's portfolio will increase from 13.3% to 15.2% of income. In addition to this, the portfolio's Weighted Average Lease Length will extend to 8.7 years, up from 8.3 years.

The hotel, which will also include a conference centre, business meeting rooms and restaurant space, is strategically positioned in the heart of Newcastle city centre. It is located opposite the popular Eldon Square shopping centre and five minutes' walk from the central train station and forms part of a mixed use scheme being developed by McAleer & Rushe.

UKCPT also announces that it has disposed of one of its smallest assets, a 25,802 sq ft office in Aberdeen for £6.5 million, representing a premium to book value.

Will Fulton, Fund Manager at Standard Life Investments, said: "These transactions demonstrate our continued efforts to increase the portfolio's exposure to high quality assets with the potential for income and capital growth. As one strand of this strategy we have been assessing opportunities in the alternative sectors as a means to enhance longer-term income and dividend cover. Dalata and its flagship Maldron brand are an exciting, well managed, high quality, competitive hotelier with good Board level experience of operating in the UK hotel market. Its business plan is strong and I believe this hotel will compete well in the Newcastle market - home to leading universities and a thriving business community - whilst providing a high quality long and increasing income stream at an attractive yield on cost."

[rabbrooks] 13/10/2017 17:33

When i read the most recent report i could not believe the self satisfaction nonsense being expressed in classic PR mode. The shares are still down 12 % from the flotation price . The dividend is less. The prospects are not great. We all have been foolish holding on to this investment. I hope someone could encourage a competitor to take them over which may create a premium over the present price.

[8w] 21/6/2017 14:54

Thanks for your thoughts Sky.

[skyship] 21/6/2017 14:23

Good question! I assume down to a number of factors:

# A London bias
# LTV stats (gearing)
# High MCap makes the leaders more impervious to takeover
# ???

A pretty full list of other players appears on the CP+ thread - see link below. My favourite remains PCA which at 380p provide a 4.9% Yield at a 14.2% discount.

[8w] 21/6/2017 10:53

Sky, why do these mid cap. REITS trade on a premium whilst the big boys, BLND, trade on a discount of circa 30%? If it is because of BLND having a London focus surely a property bust in the capital is going to affect property across the whole country?

[skyship] 17/6/2017 14:20

UKCM has given holders a great run this year; but that now looks way overdone. With increasing talk of a Summer Shakeout, now looks a very good time to bank profits as at 92p the yield is down to 4% and the shares trade at a 5.3% premium to the Mar'17 NAV.

With the 50 day SMA at an uncomfortable premium to the 200 day, best to move out as the share price approaches a double top to the 2015 high:


free stock charts from uk.advfn.com

[speedsgh] 24/3/2017 13:26

Edison initiates coverage on UKCM with new research note...

Income key in world of low numbers -

[speedsgh] 27/1/2017 08:59

UKCPT sells Soho office for £30.5 million -

In the Sept 2006 IPO prospectus, UKCM valued 13 Great Marlborough Street at £15.05m so there has been fair capital appreciation since & they will be banking a decent profit on the £30.5m sale.

[dr biotech] 19/8/2016 07:02

A decent write up in the telegraph. I didn't buy any of here on the dip but I did get more in SLI, I have enou I this sector now

[dr biotech] 27/6/2016 19:35

Capitulation today. Wonder where the bottom will be

[jombaston] 16/5/2016 21:38

The 2 companies are chalk and cheese. UAI has much more development, more concentrated in the SE & London and higher gearing.

UKCM is more diversified, less geared, less London and much more conservative.

Those interested in a more racy and exciting company please go to the other bulletin board!

[skyship] 07/5/2016 13:53

schofip - this is what I posted; and I make no apology for doing so.
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As for analysis, UKCM may be a reasonable long-term investment; certainly never a punt. There is much better value elsewhere in the propco sector for both growth and yield. The 8% NAV discount does not represent particularly good value at this stage of the cycle; and the 4.6% yield is unexceptional.

On a slightly more speculative tack perhaps consider UAI at just under 200p ahead of the end April Prelims which should reveal an NAV of 300p and a yield North of 6%. More interesting propco plays over on the CP+ thread.

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I apologise for being over-optimistic on the NAV. Thought it would rise from 274p to 300p; but actually only hit 291p.

Still, the 8p Special Dividend is repeated and a new dividend policy confirmed. So the yield seems to be a very healthy 7.1% @ 194p; and at an Ex-dividend NAV of 283p the discount is a sector beating 31%

On the Finals UAI rose to 207p, then drifted back to 192p; before closing out the week at an admittedly disappointing 194p. Nevertheless, Ennismore increased its holding by another 500k - so I am in good company; and believe these will once again cross North of 200p as the stats are absorbed.

Considerably better value than UKCM....pretty obvious really!

[schofip] 03/5/2016 10:11

Oh well Skyship here we are in May and unfortunately U&I are below your highly unambitious 200p price target with 300p a pipe dream so I expect your apology as promised.

[dr biotech] 28/4/2016 16:25

Thats quite a high single day drop today..wonder if its just yesterdays drop in NAV passing through. My other property investments are more stable..

[schofip] 09/3/2016 09:10

Re-iterating "I may be wrong". So let's wait and see. Happy to apologise for casting doubt if proved wrong. These bulletin boards are full of rampers so very cautious of people suggesting buying in.