The £554m Balanced Commercial Property Trust (BCPT) board has initiated a strategic review to consider the future of the investment trust.
In a stock exchange announcement this morning (15 April), the board said the Reit faces “significant challenges” due to a difficult economic and property market backdrop amid higher interest rates and the current dislocation in capital markets.
They added that despite steady performance over recent years, BCPT’s shares continue to trade at a material discount, currently 28.5%.
As a result, the board is considering all options to maximise shareholder value, including a sale. However, they noted that the trust is not currently in discussions with any potential buyer.
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Paul Marcuse, chairman of BCPT, said: “Following a very challenging period for Reits during the Covid 19 pandemic and subsequent economic and geopolitical events, BCPT has been repositioning the portfolio away from less attractive sectors and realising cash to facilitate strategic options for the company. We believe our monthly dividend offers an attractive level of regular income to shareholders.
“We recognise, however, despite recent improvements in the company’s share rating, the share price remains at a material discount to the company’s net asset value. In line with our commitment to do the right thing for our shareholders as a whole, we have commenced this strategic review to determine the best way to enhance value for shareholders, after which the independent board will determine the best way forward.”
The trust is subject to a continuation vote this year, which will be held following the outcome of the strategic review.
Other potential options the board will consider during the review include continuing the trust with further actions to narrow the discount, commencing a managed wind down, or changing the trust’s investment strategy.
The Reit, launched in 2005 and managed by Columbia Threadneedle’s Richard Kirby, aims to invest in a diversified portfolio of UK commercial property.
