Net Asset Value(s)

RNS Number : 6665Y

UK Commercial Property Trust Ltd

09 July 2008

Net asset value

The unaudited net asset value per share of UK Commercial Property Trust Limited as at 30 June 2008 was 85.8p. This represents a decrease of 3.6 per cent. from the net asset value per share as at 31 March 2008.

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 2008 of £701 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 2008. It does not include provision for any unpaid dividends for the periods prior to 30 June 2008 including the dividend for the quarter to 30 June 2008. It is expected that the shares will go ex-dividend in August 2008 and that the dividend will be paid in August 2008. The adjusted net asset value per share after deducting such quarterly dividend is 84.5p.

The NAV per share at 30 June 2008 is based on 867,126,287 Ordinary 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 31 March 2008 to 30 June 2008.

UK Commercial Property Trust Limited	Per Share (p)	Attributable Assets (£m)
Net assets as at 31 March 2008	89.0	771.4
Unrealised decrease in valuation of property portfolio	(2.0)	(16.9)
Realised loss on sales of properties	(0.4)	(3.5)
Capital expenditure	(0.5)	(4.6)
Income earned over the period	1.4	12.2
Expenses over the period	(0.4)	(3.1)
Dividends paid on 30 May 2008	(1.3)	(11.4)
Net assets as at 30 June 2008	85.8	744.1

UK Commercial Property Trust Limited
Net Asset Analysis as at 30 June 2008	£m	%
Property Portfolio
Office	350.6	47.1
Retail	222.6	30.0
Industrial	127.9	17.2
Total Property	701.1	94.3
Net Current Assets	43.0	5.7
Total Net Assets as at 30 June 2008	744.1	100.0

The annualised total expense ratio of the Company for the period 1 April 2008 to 30 June 2008, based on the value of the assets as at 30 June 2008 and on the basis of annualised expenses, was 0.8% of the average total assets of the Company. 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 issue costs, 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 TSB Scotland plc now in place.

Over the period from 22 September 2006 (launch) to 30 June 2008 the unaudited net asset value per share calculated under IFRS has decreased by 11.7% from 97.2p to 85.8p.

Breakdown in valuation movements over the period 31 March 2008 to 30 June 2008.

Set out below is a breakdown of the movement in the external valuation of the property portfolio over the period from 31 March to 30 June 2008.

UK Commercial Property Trust Limited	Exposure % as at 30 June 2008	Capital Value Shift %	£m
External Valuation at 31 March 2008			743.00
Sub Sector Analysis
Retail	31.75	-5.02	-11.76
High St - South East	8.76	-3.84
High St - Rest of UK	2.69	-6.02
Shopping Centres	9.50	-4.38
Retail Warehouses	10.80	-6.25

Offices	50.01	-0.94	-3.32
City	0.00
West End	19.88	5.96
South East	12.22	-5.36
Rest of UK	17.91	-4.79

Industrial	18.24	-3.36	-4.45
South East	10.45	-4.27
Rest of UK	7.79	-2.11

Adjustment for disposals	-	-	-22.35
Adjustment for acquisitions	-	-	0.0
External valuation at 30 June 2008		-2.71	701.12

Investment Manager Commentary

Increased economic pessimism combined with a possible rise in interest rates to counter higher inflation had a negative impact on the property investment market over the course of Q2 2008. Transaction levels in H1 2008 were virtually half of those reported in the equivalent period of 2007. Whilst there are continued references to a 'wall of money' waiting to enter the market, there is little evidence to date that these investors are prepared to make a move back into property until there is evidence that the market has stabilised.

Against this background, the IPD Monthly Index has continued to drift downwards over the course of 2008. The total return for the Index for five months to end May 2008 (the latest period available) is -4.5%; this reflects a capital decline of -6.7% and an income return of 2.3%. The valuation decline in the Company's portfolio (excluding transactions) was -2.71% over the course of the quarter to end June. The King William Street property in the City of London was sold during the course of Q2 for £21.0m. The valuation decline including this transaction was -2.81%.

As in Q1 2008, the Company's retail warehouses were the worst affected subsector, being hit by an increasingly bearish market for bulky goods retail warehouse parks, where prospects for rental growth are perceived as being relatively poor. From a positive perspective, the Company has a relatively low exposure to this market. In addition, the Company now has no exposure to the City. The Company's West End stocks held up well, due almost entirely to the valuation uplift generated at Chancery Lane, London, where the lease has been extended with the tenant for a minimum of a further five years. The Company has also taken the opportunity to build up a cash reserve from the proceeds of the sale of the property in King William Street and from earlier sales in Uxbridge which, when combined with the £80m loan facility put in place in mid June with Lloyds TSB Scotland plc, will leave the Company well placed to take advantage of any opportunities that present themselves as being potentially value enhancing to shareholders.