Net Asset Value

Guernsey, 26 April 2017

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

Net Asset Value at 31 March 2017

UK Commercial Property Trust Limited (FTSE 250, LSE: UKCM), advised by Standard Life Investments, owns a diversified portfolio of high quality income producing UK commercial property. It announces its unaudited quarterly Net Asset Value (“NAV”) as at 31 March 2017.

Strong performance

• NAV per share of 87.4p (31 December 2016: 86.2p), resulting in a NAV total return of 2.5% in the quarter.

• Like-for-like portfolio capital value increased by 1.6% during the quarter which  compares favourably to the 0.9% increase in the MSCI/IPD Monthly index for the period.

Delivering value through asset management

• £1.3 million of annual rental income, in line with ERV, secured from eleven new leases and nine lease renewals / rent reviews including:
   
  • The completion of a new 10 year lease, following the comprehensive refurbishment of the property at 81 George Street, Edinburgh, securing a headline rent of £30 per square foot per annum to a global power generation company InterGen.
     
  • Three further lettings completed with Airbase Interiors, Capital Scenery and GlassEco International at Gatwick Gate, Crawley, securing over £600,000 per annum, improving capital value and increasing unexpired lease length. 

• Contracts exchanged with Laura Ashley on the remaining 5,000 sq.ft. unit of the new 25,000 sq.ft. development to be built on St George’s Retail Park, Leicester.  On completion Laura Ashley, Tapi Carpets and Wren Living, will be secured on new 10 year leases generating over £500,000 per annum of additional rent with an expected yield on cost of 8.0%.
   
• Void rate of 4.1%*, well below the MSCI/IPD benchmark figure of 6.9%**

Positive investment activity

In early January 2017, the Company took advantage of a special opportunity to sell one of its West End office properties, 13 Great Marlborough Street, Soho to the owner of the adjoining property. The lease to Sony had less than two years remaining, the sale removing short term letting risk and the need for potentially significant capital expenditure. The disposal price of £30.5m was ahead of the year end valuation and equated to a yield of 3.3%.

Some £23 million of these sale proceeds have been recycled into an investment that will produce an income yield of 5.8% through the forward funding of a 258,000 sqft, long-lease, pre-let, logistics warehouse development under construction in an established distribution location at Burton upon Trent. Palletforce Ltd has committed to a 15 year lease with RPI inflation linked rent increases of between 1%-3% per annum compounded and payable five yearly. The Company has acquired the site, construction is underway, and a balancing payment is due on completion, which is expected this summer.

Strong financial position and attractive dividend yield

• Significant financial resources of £71 million are currently available for investment.  Additional firepower from the undrawn £50 million revolving credit facility remains available.

• Low net gearing of 10.1%*** (gross gearing of 18.0%***) remaining one of the lowest in the Company’s peer group and the quoted REIT sector.

• Dividend yield of 4.1%****, comparing favourably to the FTSE All-Share Index (3.6%****) and FTSE All-Share REIT Index (3.5%****).

^{*31 March 2017
** 31 December 2016
*** Net gearing - Gross borrowing less cash divided by total assets (excluding cash) less current liabilities
        Gross gearing - Gross borrowings divided by total assets less current liabilities
****21 April 2017}

Andrew Wilson, Chairman of UKCPT, commented:

"Today's positive numbers further build on the achievements of last year, in part reflecting a number of the ongoing asset management initiatives being successfully completed. The Company's £1.278bn commercial and industrial portfolio is both well located and well tenanted with a minimal amount of unlet accommodation. UKCPT is prudently managed, has a sound financial base with cash resources to deploy in acquisitions that will be accretive to dividend cover . Despite the current political and therefore economic uncertainties at home and abroad the Company's sound property and financial position allows the future to be viewed with confidence. "

Will Fulton, Lead Manager of UKCPT at Standard Life Investments, said:

“We have had an active start to 2017, building on the momentum we created behind the delivery of our strategy last year, and have made good strides in recycling capital from sales into more attractive income opportunities.”

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 January 2017 to 31 March 2017.

UK Commercial Property Trust Limited	Per  Share (p)	Attributable Assets (£m)	Comment
Net assets as at 1 January 2017	86.2	1,120.6
Unrealised increase in valuation of property portfolio and gain on sale	1.6	19.6	Like for like increase of 1.6% in property portfolio and gain on sale of 13 Great Marlborough Street
Capital expenditure during the period	-0.2	-2.3	Principally relates to costs associated with purchase of Burton upon Trent and ongoing work at Shrewsbury to facilitate opening of Primark store.
Income earned for the period	1.3	17.4	Equates to dividend cover of 94% for the quarter
Expenses for the period	-0.5	-6.0
Dividend paid on 28 February 2017	-0.9	-12.0
Interest rate swaps mark to market revaluation	0.0	0.2	Marginal decrease in swap liabilities
Net assets as at 31 March  2017 (excl deferred tax)	87.5	1,137.5
Deferred tax	-0.1	-1.3	*See below
Net assets as at 31 March 2017	87.4	1,136.2

* Due to the refinancing of the Company’s internal loan notes it is forecast that the Company will utilise the losses it has built up since inception to offset future taxable profits. As previously stated in the NAV announcement released on 8 February 2017, the Company was required to recognise a deferred tax asset for the year to 31 December 2016. This adjustment reflects the ongoing write-off of the asset as the losses are utilised against profits.

Net Asset Value analysis as at 31 March 2017 (unaudited)

	£m	% of net assets
Retail	484.7	42.6
Industrial	425.0	37.4
Offices	238.4	21.0
Leisure	129.5	11.4
Total Property Portfolio	1,277.6	112.4
Adjustment for lease incentives	-13.2	-1.1
Fair value of Property Portfolio	1,264.4	111.3
Cash	122.8	10.8
Other Assets	23.2	2.0
Total Assets	1,410.4	124.1
Current liabilities	-22.6	-2.0
Non-current liabilities (bank loans & swap)	-251.6	-22.1
Total Net Assets	1,136.2	100.00

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 31 March 2017. It does not include provision for any unpaid dividends relating to periods prior to 31 March 2017, i.e. the proposed dividend for the period to 31 March 2017.

The NAV per share at 31 March 2017 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 87.7p (Dec 2016 – 86.5p).

Sector analysis

	Portfolio Value as at 31 Mar 2017 (£m)	Exposure as at 31 Mar 2017 (%)	Like for Like Capital Value Shift (excl sales & purchases)	Capital Value Shift (including sales & purchases)     (£m)
			(%)
External valuation as at 31 December 2016				1,280.8
Retail	484.7	37.9	1.3	6.3
High St – South East		2.9	0.0	0.0
High St- Rest of UK		5.2	2.3	1.5
Shopping Centres		7.7	4.1	3.8
Retail Warehouse		22.1	0.3	1.0
Offices	238.4	18.7	0.7	-26.8
City		2.3	2.5	0.7
West End		6.8	1.9	-26.8
South East		1.6	0.1	0.0
Rest of UK		8.0	-0.7	-0.7
Industrial	425.0	33.3	3.0	17.0
South East		24.6	3.8	11.6
Rest of UK		8.7	0.8	5.4
Leisure/Other	129.5	10.1	0.2	0.3
External valuation as at 31 Mar 2017	1,277.6	100.0	1.6	1,277.6

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014). Upon the publication of this announcement via Regulatory Information Service this inside information is now considered to be in the public domain.

Details of the Company may also be found on the Company’s website which can be found at: www.ukcpt.co.uk

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 / Polly Warrack, FTI Consulting
Tel: [phone]

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