F&C Commercial Property Trust Ltd
Rated Fund 2013, 2017-19. A reliable source of monthly income
This trust is the largest in the direct property investment trust sector with total assets of £1.4 billion, and has one of the most experienced management teams led by Richard Kirby. Matt Howard acts as his deputy. The trust has a strong performance record, having outperformed the UK property market in virtually every year since launch in 2005.
It is attractive for income investors with a current yield of 4.7%, and pays a steady monthly dividend. It has dividend cover of 79%, according to its 2018 interim report.
The quality and diversity of the properties in the trust’s portfolio stands it in good stead in current market conditions. The managers’ focus on asset management initiatives and reducing exposure to voids should also help.
The trust’s investment policy contains various limits on how the portfolio is managed that help to 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. Short-leasehold properties (with less than 60 years remaining) cannot exceed 10% of total assets at the time of acquisition. There are also limits on the proportion of the portfolio in different sectors such as offices, retail and industrial property.
The trust owns properties located throughout the country, but had almost 60% of its assets in London and the South East at the end of 2018.
It shares traded in a range of a near 10% premium to an 11% discount during 2018.
Narrative and ratings content all as of 01 January 2019.See all Money Observer rated funds
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.
Data provided by Morningstar.
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