Net Asset Value(s)

RNS Number : 7724V

UK Commercial Property Trust Ltd

16 July 2009

Net Asset Value

For the three month period from 1 April 2009 to 30 June 2009

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.

Net asset value

The unaudited net asset value per share of UK Commercial Property Trust Limited as at 30 June 2009 was 65.8p. This represents a decrease of 2.7 per cent. from the net asset value per share as at 31 March 2009.

The net asset value per share is based on the external valuation of the property portfolio prepared by CB Richard Ellis Limited as at 30 June 2009 of £545 million.

The net asset value per share is calculated under International Financial Reporting Standards ('IFRS').

The net asset value per share includes all current period income and is calculated after deduction of all dividends paid prior to 30 June 2009. It does not include provision for any unpaid dividends for the periods prior to 30 June 2009 including the dividend for the quarter to 30 June 2009. It is expected that the shares will go ex-dividend on 12 August 2009 and that the dividend of 1.3p per share will be paid on 28 August 2009. The adjusted net asset value per share after deducting such quarterly dividend is 64.5p.

The NAV per share at 30 June 2009 is based on 838,554,858 shares of 25p each, being the total number of shares in issue at that time.

Breakdown of NAV movement

Set out below is a breakdown of the change to the unaudited net asset value per share calculated under IFRS over the period from 1 April 2009 to 30 June 2009.

UK Commercial Property Trust Limited	Per Share (p)	Attributable Assets (£m)
Net assets as at 1 April 2009	67.6	566.5
Unrealised decrease in valuation of property portfolio	(1.5)	(11.8)
Realised losses on property portfolio during the period	(0.1)	(0.9)
Capital expenditure during the period	(0.1)	(1.0)
Income earned for the period	1.4	11.6
Expenses for the period	(0.2)	(1.8)
Dividend paid on 29 May 2009	(1.3)	(11.0)
Net assets as at 30 June 2009	65.8	551.6

UK Commercial Property Trust Limited
Net Asset Analysis as at 30 June 2009	£m	%
Property Portfolio
Office	263.5	47.8
Retail	187.8	34.0
Industrial	93.7	17.0
Total Property	545.0	98.8
Net Current Assets	6.6	1.2
Total Net Assets as at 30 June 2009	551.6	100.0

The total expense ratio of the Company for the period ended 30 June 2009, based on the total assets as at 30 June 2009 and on the basis of annualised expenses, was 0.85% (March 2009: 0.85%). For the purposes of this calculation, 'expenses' includes the costs of running the Group, including the investment management fee, administration fees, Directors' fees, insurance costs, Board costs, registrar costs and any irrecoverable VAT, but excludes capital expenditure and refurbishment and irrecoverable property running costs.

Over the period the Company had no borrowings. However, as per the 20 June 2008 announcement, the Company has an £80 million seven year term loan facility with Lloyds Banking Group plc in place.

Review of the period

The second quarter of the year witnessed a slightly improved level of sentiment in the economy with certain data suggesting a possible bottoming out of the recession. Whilst there is an overall feeling that some of the worst fears of earlier in the year may not be realised, there are still obstacles in the way of any real recovery for the economy.

With Quarter 1 GDP revised down from -1.9% to -2.4%, the trend for GDP is still negative and, as the UK economy continues to contract, rising unemployment, higher savings and weaker earnings/trade will inevitably remain a feature of the UK economic landscape.

Any sustainable growth in the economy has to be reliant on an improved credit flow, which is still not apparent, particularly as the government's stimulus package remains focused upon a narrow range of the financial markets. With interest rates unchanged for the last few months, they seem set to remain at their current level throughout the rest of 2009.

In the property market, whilst all market indices still highlight a general fall in values, the rate of decline has undoubtedly slowed with combined capital value falls of -3.9% for April and May compared to -6.2% for February and March.

For the first time in a while the yield outlook is encouraging, with positive momentum in pricing at the prime end of the market in areas such as High St retail, Open A1 retail warehouses, supermarkets and SE industrial estates. This positive trend is, however, more a factor of restrictions in availability of prime stock and is not necessarily a portent for the wider market, where there is still a lack of occupational demand. This is manifesting itself in falls in rental values, which are expected to remain a feature of the market throughout 2009/2010. Certain key markets, such as West End and Central London offices, have fallen significantly, (down 10.5% and 8.9% respectively over the last three months) but, generally speaking, rental declines have so far been relatively modest elsewhere. A few larger transactions have contributed to an improved level of transaction volumes for the quarter but the market is characterised by limited available stock and low levels of liquidity.

During the quarter, the value of the company's portfolio fell by 2.4% on a like-for-like basis (i.e. excluding sales and acquisitions). The company's retail holdings performed best (-0.05%) driven by stabilising/improved yields for its High St and Retail Warehouse holdings. The Trust's office holdings were the poorest performers (-3.64%) as the extent of the rental decline became apparent, particularly in Central London and the South East. Although the industrial holdings showed a capital value fall of -2.7%, this was mainly as a result of the void exposure of the multi-let estate in Sunbury rather than the distribution warehouses, which held their value. Overall, the level of voids within the portfolio reduced slightly and as at 30 June, stood at 3.37% of ERV.

On 16 April, the Trust completed the purchase of Kew Retail Park, Richmond for £31.35m. The subsequent valuation as at 30 June exceeded this level absorbing some of the costs associated with the acquisition. The Trust also completed the sale of a vacant industrial unit at Knaves Beech, Loudwater, which raised £1.15m on 1 May.

As at 30 June the Trust held £11.9m in cash.

The resilience of the company's portfolio secured on relatively long leases with strong covenants together with the (as yet undrawn) £80m debt facility from Lloyds Banking Group offer the Company a sound platform for further acquisitions which the Manager continues to endeavour to source.

Breakdown in valuation movements over the period 1 April 2009 to 30 June 2009

Set out below is a breakdown of the movement in the external valuation of the property portfolio over the period from 1 April 2009 to 30 June 2009.

UK Commercial Property Trust Limited	Exposure % as at 30 June*	Capital Value Shift* ( %)	£m
External Valuation at 1 April 2009			526.2
Sub Sector Analysis
Retail	34.46	-0.05	-0.07
High St - South East	9.52	0.00	0.00
Shopping Centres	8.81	-4.19	-2.10
Retail Warehouses	16.13	3.76	2.03

Offices	48.35	-3.64	-9.96

West End	19.53	-1.52	-1.65
South East	11.00	-9.40	-6.23
Rest of UK	17.82	-2.09	-2.08

Industrial	17.19	-2.57	-2.48
South East	10.04	-4.54	-2.60
Rest of UK	7.15	0.28	0.12

Adjustment for disposals - Unit B Knaves Beech, Loudwater			-0.74
Adjustment for acquisitions - Kew Retail Park Richmond			32.00
External valuation at 30 June 2009		-2.38%	545.0