Moneywise First 50 Funds: F&C Commercial Property Trust reports a 'resilient' portfolio with returns of 8.8%

Published by Holly Black on 17 April 2018.
Last updated on 17 April 2018

F&C Commercial Property Trust reports a ‘resilient’ portfolio with returns of 8.8%

The F&C Commercial Property Trust has reported a return of 8.8% for 2017.

One of the Moneywise First 50 Funds for beginners, it invests in commercial property across the UK including offices, warehouses and retail and leisure space.

The trust makes money by renting these properties to tenants as well as benefiting from any increase in their value.

F&C says investments in industrial and logistics sites were the most successful for the year, delivering a stonking return of 17.7% in the year. Its top-performing investment was St Christopher’s Place Estate, a buzzing district near London’s Oxford Street with shopping and eateries.

Commercial property funds are popular choices for investors looking for a steady stream of income, and F&C did not disappoint in 2017 with a dividend yield of 4.4%.

The F&C trust manages £1.4 billion of investors’ money with around a third of its assets in office space and another 31% in retail. Some 34% of the portfolio is in the West End of London, a further 25% in the South East and 12% in Scotland.

Its largest assets include a business park unit in Aberdeen, retail park space in Newbury and Solihull, and an office building in St James’s Street in London.

F&C’s performance for the year was boosted by its decision to avoid investing in shopping centres, which have been out of favour as consumers move away from the high street to online shopping.

In the year, the trust sold an office site on Great Pulteney Street in London’s West End and used the proceeds to buy One Cathedral Square, a new 56,821 square foot site in the centre of Bristol.

Fund manager Richard Kirby says: “Our long-term outperformance and highly secure income return remain on track and we believe we have a resilient portfolio that is well position for the year ahead. We keep a close eye on the investment market for opportunities that meet our criteria and will provide sustainable and secure income streams.”  

 

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