As highlighted in our morning briefing earlier today, Value and Indexed Property Income Trust (VIP) has formally entered the UK REIT regime as of 1 April 2025, following shareholder approval at its 20 March general meeting. The move brings a shift in tax treatment and positions the trust alongside peers in the listed property sector. From now on, qualifying distributions will be paid as Property Income Distributions (PIDs), starting with the proposed final dividend of 3.6p, due on or around 25 July 2025, subject to shareholder approval. A third quarterly dividend of 3.4p, for the year to 31 March 2025, will be paid on 25 April 2025.
Separately, VIP has published a trading statement this morning that includes details of its full year portfolio valuation – an independent valuation from Savills put the year-end portfolio at £146.0m, reflecting a 6.3% net initial yield. Over the six months to 31 March, VIP delivered a total return of +4.8%, ahead of its MSCI UK Quarterly Property Index benchmark. The full-year total return came in at +9.0%.
VIP remains fully invested in a portfolio of direct commercial property with a focus on long, index-linked income. VIP’s dividend has grown by 6.5% per annum over the past 38 years against 3.8% for the Retail Price Index.
The trust disposed of six assets over the financial year, raising £11.85m, +5% ahead of valuation, and exited shorter-let and over-rented assets. The recent sale of two industrial properties in Dundee and Staines for £2.1m and the exchange of contracts on a Doncaster leisure asset for £2.5m will leave the portfolio 100% freehold once completed.
One acquisition was made during the year – Bridgemere Garden Centre, let to Blue Diamond UK on an RPI-linked lease to 2049, acquired for £16.5m at a yield rising to 7.8% by year-end.
VIP’s portfolio is fully let, with a WAULT of 13.3 years to break, and all rental income now benefits from index-linked increases. The trust collects 100% of rent due, with 79% of income derived from its top 10 tenants, including household names such as Marks & Spencer, Sainsbury’s, Premier Inn and HM Government. VIP has no empty properties, no offices or high street retail assets in the portfolio. 29% of the portfolio is in supermarkets, 23% is in warehouses/industrials, 25% in bowling, a health club and a caravan park, 12% in a garden centre, and 11% in hotels and pubs.
In terms of capital structure, VIP repaid £6m of a £15m loan maturing in March 2026, reducing its average interest rate to 4.6% (96% fixed), with average debt maturity of 6.9 years and an LTV of 38%.
VIP’s dividend has grown at a compound annual rate of 6.5% over the past 38 years, outpacing inflation and underscoring its long-standing income-focused approach.
