BMO Commercial Property Trust will change its name to Balanced Commercial Property Trust following the sale of its manager’s business from Bank of Montreal (BMO) to Ameriprise Financial, parent company of Columbia Threadneedle.
The announcement was made in the group’s annual results where it delivered a net asset value (NAV) total return for 2021 of 18.9% and a share price total return of 37.8%.
Despite the performance, the company was still trading on a discount to NAV of 22.3% at the end of 2021 (which has since narrowed to 14.4%).
The group’s portfolio weighting to the industrial and logistics sector increased during the year to 30.6% (from 19.1%), but this is still far below most of their peers in the Property – UK Commercial sector.
The sector was the standout in terms of portfolio performance in the year, recording a total return of 39.8% over the year, reflecting capital growth of 34.0%. Retail warehouses produced a total return of 28.2%, while offices produced a total return of 9.4%.
The group’s largest asset, St Christopher’s Place in London’s West End, saw a capital value fall of 4.2% in the year (following a 17% fall in 2020).
On St Christopher’s Place, the chairman, Paul Marcuse, said: “It will take time for Oxford Street to recover from the effects of the pandemic but landlords along the street are now appraising significant investment into development and repositioning opportunities. Encouragingly we saw footfall recover in quarter four to 2019 levels and the return of employees to the office. An increase in international travel and the long-awaited opening of the Elizabeth Line later this year should also benefit St Christopher’s Place.”
Dividend
The company paid 12 interim dividends totalling 4.25 pence per share during the year. There were 10 monthly dividends of 0.35 pence per share, followed by an increase in November 2021 to 0.375 pence per share. From May 2022, the monthly rate will be increased to 0.4 pence per share (an increase of 6.7%) due to greater certainty over rent collections.
Share Buybacks
The company launched a share buy-back programme in June 2021, using some of the proceeds from property sales, and purchased 46.3 million shares by the year end at an average discount of 22.3% and a cost of £45.2m. This enhanced the NAV by 2.2 pence per share during the year. The board said consideration would continue to be given to further buybacks if it believed that it continued to be in the best interests of shareholders.
Cash and Borrowings
The company had £138.1m of cash reserves at the year end. The group’s borrowings comprise a £260m term loan with Legal & General Pensions Limited, maturing on 31 December 2024. The Company also has a £50m term loan and an undrawn £50m revolving credit facility with Barclays. The Barclays facilities were extended by a year and are due to expire on 31 July 2023, with the option of a further one-year extension. As at 31 December 2021, the Company’s net gearing was 14.4%.
BCPT : BMO Commercial Property Trust to change name