UK Commercial Property REIT has reported a 0.5% increase in its net asset value to £1.2bn, but its NAV total return for 2018 fell to 4.5%, down from 12.2% in 2017.
In its latest full-year results, the business, which is managed and advised by Aberdeen Standard Investments, reported a portfolio return for the year ended 31 December 2018 of 5.9%, below the MSCI IPD benchmark of 6.7%.
EPRA earnings per share fell to 3.03p from 3.42p in 2017.
However, the value of UK Commercial Property REIT’s portfolio increased by 3.4% to £1.45bn.
The company, which converted to a REIT in July last year, said the strong performance of its industrial assets, which delivered a total return of 16%, was partially offset by the ongoing challenges faced by the retail sector and one-off transaction costs in Q4 2018.
Chairman Andrew Wilson said: “During the past year the company has completed on a number of strategic initiatives to ensure that UK Commercial Property REIT remains well positioned for growth despite the current climate of political uncertainty. This includes the company’s conversion to REIT, as well as a debt refinancing which concluded post the year end and will provide greater flexibility and firepower while reducing borrowing costs.
“The company has continued to reduce its exposure to the retail sector and to sell out of ex-growth assets, recycling proceeds into opportunities with sustainable income characteristics whilst maintaining low gearing. As a result, an increasing percentage of portfolio income is subject to fixed uplifts, underpinning an attractive dividend yield and the potential for improving dividend cover.”
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