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BMO Commercial Property Trust reports interims in tough climate

BMO Commercial Property Trust reports interims in tough climate – BMO Commercial Property Trust (BCPT), formerly F&C Commercial Property Trust, has reported interim results to 30 June 2019. The company invests in a number of sectors, including industrial warehouses, office buildings, retail and student housing. The company also has the mandate to invest upto 15% of its asset base indirectly, into property funds.

Over the results period, there has been continued uncertainty surrounding commercial property markets in the UK, with the trading environment for retailers and the potential impact of Brexit causing particular concern. BCPT say this has been challenging for the listed real estate sector with many of the large cap companies trading at significant discounts to their NAVs.

Against this backdrop, the company’s share price total return to shareholders over the six-months to 30 June 2019 was -8.0 per cent. The share price at the period-end was 111.8p, representing a discount of 18.0 per cent to the NAV per share of 136.3p. The NAV total return over the six months was -0.4 per cent.

Chairman’s outlook

Chairman, Martin Moore, said this following in his outlook statement: “The property market continues to deliver positive total return, but the pace has slowed and investment activity has weakened. The market is likely to encounter continued headwinds related to Brexit and its political and economic ramifications. Slower economic growth and political uncertainties internationally are also affecting sentiment. However, post Brexit, if there is some easing in fiscal policy and interest rates are kept low, as the market expects, then this should provide some support for property, particularly from investors seeking a higher-yielding alternative to gilts.

Total returns are expected to be low single-digit and will be driven by income, with well-specified and well-let assets in established locations likely to out-perform.

Notwithstanding the short-term pressures in the retail sector, the company has a well-positioned and resilient portfolio with exciting opportunities across many sectors to add value and deliver sustainable long-term rental income. Our efforts continue to be focused on delivering these over the months ahead.”

Portfolio Breakdown

Sector 30-06-2019 (%)
Offices 39.5
Retail 22.4
Retail Warehouses 10.6
Industrial 18.2
Alternative 9.3
South East 21.6
London – West End 36.0
Eastern 2.2
Midlands 11.9
Scotland 12.6
North West 11.8
Rest of London 1.5
South West 2.4

BCPT: BMO Commercial Property Trust reports interims in tough climate


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