LONDON (Alliance News) - F&C Commercial Property Trust Ltd on Thursday said its net asset value per share rose in the first half, bolstered by an unrealised increase in the value of its direct property portfolio and net revenue.
The company said that investment performance is likely to "moderate" as central banks begin to increase interest rates, although the hikes are expected to be gradual. Chairman Chris Russell cautioned that some parts of the investment market may be losing some discipline.
"With the economy predicted to see further growth, out-performing many of its European neighbours, rental growth is expected to be the principal driver of positive market performance.There are continuing concerns, however, that pricing in some parts of the investment market may be running ahead of the economic and property market fundamentals," Russell said in a statement. He said UK property is attractively priced against other assets.
The trust said its net asset value total return for the six months ended June 30 was 8.2%. The ungeared total return from the property portfolio was 7.4%. NAV per share was 129 pence at the end of June, compared with 122.1p six months earlier.
F&C Commercial Property Trust said that was a favourable performance against the 6.5% total return from the benchmark Investment Property Databank Quarterly Universe.
"The UK commercial property market has continued to deliver strong positive returns, led by the investment market but also benefiting from a growing economy and an improving occupational market, as the recovery spreads beyond London and into the regions. Rental growth is now being recorded in most parts of the market, with London leading the way," Russell said.
The office and industrial sectors have generally out-performed the retail sector outside London. The investment market has been highly competitive and pricing has responded to the strength of demand from a wide range of investors. With interest rates remaining low, property is still attractively priced against the risk-free rate and investment volumes are high by historic standards," Russell said.
F&C Commercial Property Trust shares were up 0.1% at 145.27 pence on Thursday morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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