Net Asset Value(s)

26 July 2016

UK Commercial Property Trust Limited (“UKCPT” or “the Company”)

Net Asset Value at 30 June 2016

UK Commercial Property Trust Limited (LSE: UKCM), the largest Guernsey based, UK focused, London listed commercial property investment company, which is advised by Standard Life Investments, announces its unaudited quarterly Net Asset Value (“NAV”) as at 30 June 2016.

Key Points:

• 1.7% NAV total return for the quarter with an increase in unaudited NAV per share of 0.6% to 86.5p (Mar 2016: 86.0p);

• Like-for-like portfolio capital value growth of 0.5% during the quarter which compares favourably to the IPD Monthly Index capital return of -0.1%;

• Sales of Arlington Street, London, W1 and Dolphin House, an office in Sunbury-on-Thames, for a combined £45.6 million prior to the UK referendum on EU membership, representing an aggregate 14% premium to the 31 March 2016 market value;

• Void rate of 2.8% as at 30 June, well below the IPD figure of 6.7%*;

• Strong financial resources with cash of £114 million as at 30 June of which £70 million is available for investment after allowing for dividend and capital expenditure commitments with further cash available in the form of a £50 million revolving credit facility;

• Low, prudent net gearing of 10.7%** (gross gearing of 18.1%) as at 30 June;

• Attractive dividend yield of 4.8%***, which compares favourably to the FTSE All-Share Index (3.5%)*** and FTSE REIT Index (3.6%)***.

* As at 31 March 2016

** Gross borrowing less cash divided by total assets (excluding cash) less current liabilities

*** As at 22 July 2016

Andrew Wilson, Chairman of UKCPT commented:  “We believe that UKCPT, with its strong, defensive characteristics of a well-diversified portfolio and income stream, low void rate, and significant cash resources coupled with low gearing and an attractive yield, is well positioned for the current market environment.”

Will Fulton, Fund Manager at Standard Life Investments commented:  “Whilst the EU referendum result has dominated recent news, this has been a robust quarter for UKCPT, during which, on top of our ongoing positive asset management activity, we completed the timely and successful sales of  Arlington Street and Dolphin House, maximising their capital returns and delivering shareholder value.”

Breakdown of NAV movement

Set out below is a breakdown of the change to the unaudited net asset value per share calculated under International Financial Reporting Standards ("IFRS") over the period from 1 April 2016 to 30 June 2016.

UK Commercial Property Trust Limited	Per  Share (p)	Attributable Assets (£m)	Comment
Net assets as at 1 April 2016	86.0	1,117.1
Unrealised increase in valuation of property portfolio	0.5	6.1	Like for like increase of 0.5% in property portfolio
Gain on sale of assets	0.4	5.6	Realised gain on sale of assets at Arlington Street, London and Dolphin House, Sunbury
Capital expenditure during the period	-0.1	-1.0	Principally relates to costs associated with sale of Arlington Street and Dolphin House plus  asset management initiatives at St.Georges Retail Park, Leicester and Shrewsbury
Income earned for the period	1.2	16.4	Equates to dividend cover of 91% for the quarter
Expenses for the period	-0.4	-5.5
Dividend paid on 31 May 2016	-0.9	-12.0
Interest rate swaps mark to market revaluation	-0.2	-2.1	Increase in swap liabilities following fall in interest rate expectations due to result of EU referendum
Net assets as at 30 June 2016	86.5	1,124.6

Sector Analysis

	Portfolio Value as at 30 Jun 2016 (£m)	Exposure as at 30 Jun 2016 (%)	Like for Like Capital Value Shift (excl sales & purchases)	Capital Value Shift (including transactions)     (£m)
			(%)
Valuation as of 31 Mar 2016				1,315.8
Retail	461.6	36.0	0.5	2.1
High St – South East		2.9	0.0	0.0
High St- Rest of UK		2.7	3.0	1.0
Shopping Centres		7.9	0.2	0.2
Retail Warehouse		22.5	0.3	0.9
Offices	297.1	23.2	0.0	-35.9
City		2.3	1.4	0.4
West End		9.1	0.0	-36.0
South East		1.7	0.0	0.0
Rest of UK		10.1	-0.2	-0.3
Industrial	396.4	30.9	1.3	1.1
South East		22.7	1.4	0.1
Rest of UK		8.2	1.0	1.0
Leisure/Other	127.3	9.9	-0.5	-0.7
External valuation at 30 Jun	1,282.4	100.0	0.5	1,282.4

The NAV per share is based on the external valuation of the Company’s direct property portfolio. It includes all current period income and is calculated after the deduction of all dividends paid prior to 30 June 2016. It does not include provision for any unpaid dividends relating to periods prior to 30 June 2016, i.e. the proposed dividend for the period to 30 June 2016.

As a result of uncertainty following the UK’s referendum decision to exit the EU, the Company’s valuer, CBRE Ltd, included the following caveat with its valuation for the quarter ended 30 June 2016, as it did for all valuations it undertook at this date:

“Following the Referendum held on 23 June 2016 concerning the UK’s membership of the EU, a decision was taken to exit. We are now in a period of uncertainty in relation to many factors that impact the property investment and letting markets. Since the Referendum date it has not been possible to gauge the effect of this decision by reference to transactions in the market place. The probability of our opinion of value exactly coinciding with the price achieved, were there to be a sale, has reduced. We would, therefore, recommend that the valuation is kept under regular review and that specific market advice is obtained should you wish to effect a disposal.”

The Company is aware that CBRE Ltd, in undertaking more current valuations for other organisations, continues to apply a similarly worded caveat based on a continued shortage of comparable evidence of arm’s length transactions since the Referendum. 

The NAV per share at 30 June 2016 is based on 1,299,412,465 shares of 25p each, being the total number of shares in issue at that time.

The EPRA NAV per share (excluding swap liability) is 87.0p (Mar 2016 – 86.2p).

For further information please contact:

Will Fulton / Graeme McDonald, Standard Life Investments
Tel: [phone]

Edward Gibson-Watt / Oliver Kenyon, J.P. Morgan Cazenove
Tel: [phone]

Richard Sunderland / Claire Turvey / Clare Glynn, FTI Consulting
Tel: [phone]

The above information is unaudited and has been calculated by Standard Life Investments Limited.

This announcement contains inside information.