UKCM maintains dividend as net asset value falls

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UK Commercial Property REIT maintained its dividend in its latest quarterly update on Monday, even after its net asset value fell 10.1% to 101.5p per share.

The FTSE 250 real estate investment trust said its total net asset value return for the third quarter was -7.9%, while the first nine months of 2022 showed an overall net asset value reduction of 0.5. % and a total return of 3.7%.

It recorded a 7.1% decline in the capital value of its portfolio on a like-for-like basis, net of capital expenditure, to £1.6 billion, compared to the capital value of the MSCI index. UK Monthly Property Index, which fell 5.1% in the quarter.

Rent collection rates had normalized to pre-pandemic levels, the council reported, with 97% received for the fourth quarter of 2022 and 98% for the year to date.

The quarterly dividend was kept at 0.85 pence per share, payable in November.

EPRA earnings per share for the quarter came in at 0.73p, compared to 0.83p in the June period, giving dividend coverage of 86.3%, with dividend coverage for the nine months of 96.9%.

UKCM said it was still “one of the least leveraged companies” in its peer group at 16%, with debt drawn down at a blended interest rate of 3.16% per annum, with 75% at fixed rate.

The weighted maturity was 5.2 years and all bank covenants were “well covered”, the board said.

“Since our last report, and as widely anticipated, the economic environment has become more challenging,” Chairman Ken McCullagh said.

“Rising interest rates led to lower yields, which in turn put downward pressure on valuations.

“We have continued to focus on our strategy that we have put in place over the past few years to proactively manage our portfolio towards high quality assets in sectors that are supported by structural drivers and societal changes, which which positions us well for the future.”

McCullagh said the company’s assets were “well positioned” to provide growth and income security, as evidenced by the continued high occupancy of its portfolio as the company continued to sign tenants to new tenants. rents or at a rental value higher than those of the vacancy or the leases.

“I am even more reassured by the fact that our balance sheet remains lightly leveraged, with more than three-quarters of our debt at fixed rates and continuing to comfortably meet bank covenants, and undrawn debt which gives us flexibility.”

At 08:43 GMT, shares of UK Commercial Property REIT were down 1.13% to 61.2p.

Reporting by Josh White for Sharecast.com.

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