Balanced Commercial Property Trust Regulatory News (BCPT)

F&C Commercial Property Trust Limited

Interim Management Statement

For the Period from 1 July 2011 to 18 November 2011

Investment Objective

The investment objective of the Company is to provide 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.

Performance Summary

Sources: F&C Investment Business Limited, Investment Property Databank ('IPD'), Datastream.

* Calculated under International Financial Reporting Standards ('IFRS'). Net asset value total return is calculated assuming dividends are re-invested

# Gearing: Borrowings/total assets (less current liabilities)

$ Net gearing: (Borrowings - cash)/total assets (less current liabilities and cash)

Review of the Third Quarter

The property market has consistently seen positive all-property total returns for more than two years but momentum is easing and, for the quarter to 30 September 2011, the market total return was 1.9 per cent as measured by the IPD All Quarterly and Monthly Valued Funds. Performance during the quarter was driven by income. Rental growth has remained subdued at the all-property level and is narrowly based. London property continues to out-perform the regions but there has been some narrowing in the gap, and prime property has generally delivered superior total returns compared with more secondary stock. More property is coming onto the market with large single assets and portfolios to the fore, while the banks are starting to initiate more disposals as they regularise their loan books. The quarter witnessed growing concerns about the pace of recovery in the UK and internationally plus the impact of the Eurozone debt crisis. There was net investment in property by institutions, overseas buyers and quoted property companies but investors remain cautious, risk averse and focused on prime property in core established locations.

The Company's portfolio was valued at £888 million as at 30 September 2011 reflecting an ungeared capital increase, net of capital expenditure, of 1.7 per cent for the quarter, compared with IPD benchmark growth of 0.4 per cent.

The portfolio recorded a total return of 3.1 per cent over the quarter compared with the benchmark return of 1.9 per cent referred to above. This ranked the portfolio on the 7th centile against its benchmark. Over the year to date, the portfolio has produced a total return of 9.0 per cent compared with a benchmark return of 6.4 per cent, again placing it on the 7th centile. For the first time, the portfolio now has a history of top decile performance over 1, 3 and 5 years.

The relative outperformance over the quarter was driven by the Company's office properties located in the West End of Central London and St. Christopher's Place Estate, London W1. Within the Central London office portfolio, 24/27 Great Pulteney Street, London W1 provided the greatest contribution to total returns. This development of 33,000 sq ft of grade A specification offices was completed both on time and budget in late September 2011. Marketing of the building has commenced with a quoting rent of £75 psf on the upper floors. The building has been well received by the market and two floors are currently under offer with legals progressing.

During the period, the Company contracted to fund the development of student accommodation in Winchester. The five blocks, comprising 499 bedrooms will, upon completion, be let to the University of Winchester for a term of 25 years subject to fixed annual RPI increases with a collar and cap of 1.0 per cent and 3.5 per cent. The development period will extend to approximately two years. The commitment will involve approximately £26.5 million of capital expenditure and has been funded off a yield of 6.15 per cent. This is an opportunity for the Company to gain income from exposure to a growing alternative sector, supported by a long lease, some inflation hedging and in a city supported by strong underlying residential values.

Significant leasing activity during the quarter included Watchmoor Park, Camberley, where an entire building, comprising approximately 60,000 sq ft, has been let to Novartis, one of the world's largest healthcare companies, at a commencing rent of £850,000 per annum for a term of 10 years subject to rent-free periods and break clauses. The building will be substantially refurbished to a specification agreed with the tenant, involving a capital commitment of approximately £4 million. This is a significant success for the Company and enhances the overall lease expiry profile. Prior to the letting, the Company had taken an early surrender of a lease of the building which had been due to expire in February 2012. A premium of £2.9 million was received from the tenant to cover full rent, rates and service charges until the end of the lease and, in addition, a dilapidations settlement was agreed. This was the Company's largest lease event due in 2012 and the early surrender enabled the Managers to take a more pro-active stance in relation to the lease.

In addition to this, the eleventh floor of 82 King Street, Manchester was let to Caunce O'Hare & Co. Ltd for a term of ten years contracting at a rent of £134,750 pa upon expiry of a rent free period.

The void rate of the portfolio increased from 4.8 per cent to 6.6 per cent over the period and this is mainly attributable to the completion of 24/27 Great Pulteney Street. There is significant occupational interest in this building and coupled with other important leasing initiatives advanced elsewhere in the portfolio should, if they contract, reduce the void level to the long term average for the portfolio.

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Dividends

Interim dividends, in respect of the year ending 31 December 2011, each of 0.5 pence per share, were paid on 29 July, 26 August, 30 September and 28 October 2011.

The Board has recently announced a further interim dividend of 0.5 pence per share, payable on 25 November 2011 to shareholders on the register on 11 November 2011.

It is the Board's intention that the Company will continue to pay dividends monthly.

Directors' Authority to Allot Shares

The Company regularly enjoys a premium rating on its shares and good secondary market demand for them. The Company has the ability, through authorities granted at the Annual General Meeting, to issue up to 10 per cent of its shares on a non pre-emptive basis. The Company would be prepared to issue new shares, at a premium to the net asset value, if it was in the Company's and shareholders' interests to raise money to invest in UK commercial property opportunities.

Subsequent Events

The Board is not aware of any significant events or transactions which have occurred since 30 September 2011 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Quarterly and Key Information

This statement and further information regarding the Company, including movements in the share price since the end of the period and the Group's most recent annual and interim reports, can be found at the Company's website www.fccpt.co.uk.

Enquiries:

Richard Kirby

F&C REIT Property Asset Management plc

Tel: 0207 499 2244

Graeme Caton

Winterflood Securities Limited

Tel: 0203 100 0268