abrdn Property Income Trust reported annual results for 2023, in which NAV total return was -3.0%. The real estate investment portfolio returned 0.7%, which outperformed the MSCI Quarterly Property Index benchmark return of -1.5% over the same period. The company’s portfolio has outperformed the index over one, three, five and 10 years.
The group’s NAV fell 7.8% to 78.2p. The share price total return for the year was -8.2%. The share price traded persistently at a high discount to NAV throughout the year, which was one of the main reasons behind the board undertaking a review of the company’s future.
A merger with Custodian Property Income REIT failed to get enough support from shareholders and the board is now intending to implement a managed wind-down of the fund, subject to shareholder approval at an upcoming Extraordinary General Meeting (EGM) on 28 May 2024.
EPRA earnings per share for the year decreased from 2.94p to 2.83p per share, a decrease of 3.7%, providing a coverage of 71% to its 4.0p annual dividend.
Real estate outlook
Chairman James Clifton-Brown said: “Looking ahead to 2024, there is cautious optimism around the trajectory for UK real estate returns. At a macro level, the downward trajectory of inflation will hopefully continue and lead to some confidence returning to the market alongside interest rate cuts. Increased investor demand should strengthen the market for good quality real estate assets in the right areas of the market with appropriate ESG credentials.
“At a property market level, there is an expectation of continued rental growth in the industrial sector as well as the retail warehouse sector where vacancy rates have been falling. Both these sectors are areas of the market in which the Company has positioned itself with good levels of exposure, indicating continued positive performance for the portfolio.”