F&C Commercial boosted by London property sales

F&C Commercial Property Trust achieved a total return on net asset value (NAV) of 4.4 per cent for 2012 driven by strong performance of its London portfolio.

The company made a 5.7% return on its portfolio of property investments for the year, compared with a total return of 2.8% from the Investment Property Databank (IPD) benchmark.

The portfolio recorded a top quartile performance over one year and top decile over three and five years within the IPD benchmark.

The share price total return during the year was 8.2% and the share price at the year-end was 103.7p, representing a premium of 5.0% to the NAV per share of 98.8p.

F&C maintained its dividend of 6.0p per share, providing a yield of 5.8% at year end.

"Despite disappointing UK economic growth and concerns regarding the Eurozone, the UK commercial property market in aggregate delivered modest total returns throughout the year," the group said.

Performance was boosted income returns and capital values moved lower during the year.

Central London shops and offices out-performed regional counterparts and prime property beat secondary. However, occupiers were cost sensitive and rental growth was subdued.

Investors remained cautious, favouring prime buildings, established locations and assets with longevity and security of income.

While all sectors weakened in 2012, the retail sector was most affected as a result of structural and cyclical factors.

During the year the company sold two central London properties including 84 Eccleston Square for £49.0m, and 385/389 Oxford Street for £28.1m.

Sales exceeded the most recent valuation, demonstrating a strong demand from overseas investors for Central London properties.

The company also exchanged contracts to sell Charles House, 5-11 Regent Street, London SW1 for £36.0m, compared with the last external valuation of £34.4m. The sale was completed this month.

"I am pleased to report that F&C Commercial Property Trust had a successful year in 2012, making good progress in a number of key areas," Chairman Chris Russell said.