FCPT : F&C Commercial Property Trust reports strong growth in the first half of 2014
F&C Commercial Property Trust’s recent interims report an NAV total return of 12.2% whilst share price total return was 1.9% reflecting a narrowing of the premium to NAV during the period (4.1% as at the 30 June 2014). Performance compares favourably against that of FCPT’s benchmark, the Investment Property Databank (`IPD’) Quarterly Universe, which provided a total return of 8.6 per cent. The ungeared total return from the property portfolio was 10.8 per cent.
During the period FCPT, managed by Richard Kirby (pictured) purchased four office blocks in Prime Four Business Park, Kingswells, Aberdeen for £95.4m. These were funded by existing cash resources and a £30 million committed bank facility. FCPT also purchased a brand new production and distribution warehouse unit at The Hive, Liverpool International Business Park for £11.9m, reflecting a net initial yield of 6.5% as well as two small purchases on existing sites.
FCPT expect that UK commercial property will remain in favour with a wide range of investors and that overseas buyers will continue to be attracted to UK property. They expect that funds seeking long term security of income, via long leases, will also remain active in the market, particularly in London. The Managers believe that interest rate rises will be relatively modest and take place within the context of a growing economy where capacity constraints will act to support the occupational market and property performance. They believe that this outlook bodes well for the sector.