BMO Commercial Property Trust

Property

Rated Fund 2013, 2017-20. A reliable source of eye-catching income paid monthly

This trust, rebranded from F&C to BMO in 2019 following a takeover in 2014, is the second-largest in the direct property investment trust sector, with total assets of £1.37 billion. It has one of the most experienced management teams, led by Richard Kirby, who has run the trust since its launch in 2005.

It is attractive for income investors, as its current yield is 5.2% a year, paid monthly. It converted to a UK real estate investment trust in June 2019, which means it must pay out 90% of its tax-exempt income. The trust’s performance has struggled under the weight of a 32% allocation to retail and retail warehouses, which have been hit by company bankruptcies and store rationalisation programmes. Its shares went from a 5% premium in March 2017 to a 13% discount at the end of 2019. However, that masks a fairly decent longer-term rise in net asset value, up 15% and 40% over three and five years respectively.

The quality and diversity of the portfolio are plus points, as are various limits that help maintain diversification and reduce risk. For example, no single property can account for more than 15% of gross assets at the time of acquisition, and the largest five properties must be no more than 40% of gross assets. There are also limits on the proportion of short-lease properties (those with less than 60 years remaining) and the proportion of the portfolio in different sectors. The trust owns properties around the country, but 58% of its assets were in London and the south east at the end of 2019.

Narrative and ratings content all as of 01 January 2020.

See all Money Observer rated funds
Name
BMO Commercial Property Trust
Manager
BMO Investment Business Ltd
Type
Closed Ended Investment Company
ISIN
GG00B4ZPCJ00
Sector
Property - UK Commercial
Launched
17/03/2005
OCF
1.18 %
Yield
4.6 %
Benchmark
IPD UK All Property
Fund Size
£ 595.53 million
NAV
131
Gearing
128
Discount Premium
-42
The investment objective is to provide the Ordinary Shareholders with an attractive level of income together with the potential for capital and income growth from investing in a diversified UK commercial property portfolio.
Holding %
Retail 42.38 %
Offices 36.11 %
Industrial and Logistics 16.95 %
Other (Properties Investment) 2.95 %
Interest Rate Swap 0.00 %
Name
BMO Investment Business Ltd
Address
EH2 3BU, Edinburgh, United Kingdom
Legal Structure
Closed Ended Investment Company

Managers

Matt Howard
Joined 12/31/2017

Joined BMO REP in July 2017. He is Fund Manager of the Royal Sun Alliance Shareholders Real Estate Fund which is managed by BMO REP while also supporting Richard Kirby on the management of the Company. He joined BMO REP from Hermes Investment Management where he spent the past six years. He sits on the Investment Committee of BMO REP, is a Chartered Surveyor and also holds a Certificate in Investment Management.

Richard Kirby
Joined 03/17/2005

Data provided by Morningstar.

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You should be aware that prices may fall as well as rise and that the income derived can go down as well as up. When buying or selling any investment that fluctuates in price or value you may get back less than you invested. Past performance is not necessarily a guide to future performance.