Profile: F&C Commercial Property Trust (FCPT)

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As a closed-ended fund, the F&C Commercial Property trust has been largely immune from these problems and this has confirmed for many that commercial property is best-managed in an investment trust structure, which does not have the same liquidity constraints.

At £1billion, this trust is a big beast in the sector, but its underlying portfolio of properties is diverse and not confined to trophy buildings. For example, in London, it holds the glamorous Cassini House in SW1, but it also holds a retail park in Solihull and business parks in Aberdeen. The management on the trust has been stable, with Richard Kirby at the helm since 2005.

For investors looking for income, this is a good option. Not only is the yield high, at 4.7%, it helps investors diversify away from income from dividends and bond interest, potentially creating more stability. Nevertheless, the capital value has also outstripped the wider sector.

James Calder, research director at City Asset Management, has been buying the trust recently: “We looked at this fund after the Brexit vote and have been buying it ever since. It has a good management team and limited exposure to the London office space, which we have been negative on for some time – even before Brexit. It is very large, very liquid and this is important in the commercial property area.” The discount on the trust has widened since the Brexit vote, which may make it more appealing to new investors.

Published: 13 October 2016
Last updated: 13 October 2016

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