LONDON (Alliance News) - F&C Commercial Property Trust Ltd Thursday reported a huge leap in profit in the first half, boosted by valuation gains.
The FTSE 250 investment trust posted pretax profit of GBP94.4 million for the six months ended June 30, up from GBP26.8 million a year earlier, following valuation gains of GBP83.3 million compared with just GBP15.1 million a year earlier.
Rental income rose to GBP27.7 million from GBP25.4 million a year earlier.
The trust said its net asset value total return for the six month period was 12.2%. This compares favourably with a total return of 8.6% for the benchmark Investment Property Databank Quarterly Universe.
At an operating level, F&C Commercial Property added to its portfolio through the acquisition of four office blocks in Aberdeen for a combined fee of GBP95.4 million. This is a significant transaction for the company and provides it with exposure to one of the "most buoyant office markets" in the UK as well as increasing its level of dividend cover, the company said.
F&C Commercial Property also acquired a brand new production and distribution warehouse unit in Liverpool for GBP11.9 million.
Looking ahead, the company said UK commercial property is expected to remain in favour with a wide range of investors. It believes that interest rate rises will be relatively modest and take place within the context of a growing economy where capacity constraints will act to support property performance.
"With this backdrop, the board believes that the company's portfolio is well positioned to make further good progress in the months ahead," Chairman Chris Russell said in a statement. "The managers continue to seek attractive investment opportunities and to add value through pro-actively managing the existing portfolio where there are many opportunities to enhance revenue and capital returns for shareholders."
Six monthly dividends, each of 0.5 pence per share, were paid during the half-year period, maintaining the annual dividend rate of 6.0 pence per share.
F&C Commercial Property shares were quoted up 0.2% at 127.76 pence Thursday morning.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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