Property trust has Scotland on radar after ‘robust’ quarterly performance

● Aberdeen Standard Investments oversees UK Commercial Property REIT

A major UK commercial property trust with a portfolio valued at more than £1.4 billion has Scotland in its sights as it eyes fresh deals.

The UK Commercial Property REIT – one of a growing number of stock market-listed real estate investment trusts (REITS) – already has just over 8 per cent of its portfolio north of the Border. It encompasses property on Edinburgh’s George Street and a Cineworld cinema in Glasgow.

Releasing its latest set of results, the trust, which is advised by Aberdeen Standard Investments, said it had some £80 million currently available for fresh investment opportunities.

Will Fulton, lead manager of UKCP REIT at Standard Life Investments, said Scotland would certainly figure in any property acquisition plans. “We are quite selective,” he said. “We have a couple things that we are looking at. Being able to invest across sectors gives us flexibility.”

The company described its second-quarter performance as “robust”, with a net asset value (NAV) total return of 2.2 per cent. Fulton highlighted a total return of 3.9 per cent for the first half.

During the second quarter, like-for-like portfolio capital value increased by 1.9 per cent and the overall portfolio is now valued at just under £1.42bn.

“We outperformed our IPD benchmarks over the six months,” added Fulton. “That has been led by being strategically overweight in industrials and there has also been a bit of asset management.”

The company said that its strong balance sheet provided “flexibility and attractive dividend yield”. It has cash resources of £30m available for investment in addition to a further £50m from an undrawn revolving credit facility.

Net gearing of 11.9 per cent remains one of the lowest in the company’s peer group and the quoted REIT sector, it added.

Andrew Wilson, chairman of UKCP REIT, said: “It has been another active period for UKCP REIT with the group’s portfolio continuing to perform well and the successful conversion to a REIT taking effect at the start of July.

“In line with our strategy, we have crystallised value for our shareholders through the sale of 1 Rivergate in Bristol and recycled the capital into a high quality office asset, which will add materially to the group’s income stream.

“We enter the second half of the year with a good momentum and are well placed to continue to unlock value and grow income across our diverse portfolio.”