BMO Commercial Property reports fall in NAV amid Brexit headwinds

BMO Commercial Property Trust on Tuesday reported a decline in net asset value per share as Brexit ensured continued uncertainty in the UK commercial property market.

Net asset value per share declined by 2.5% to 136.3p during the six month period ended 30 June, while the trust achieved a total return of 0.5% against 3.7% in the same period last year and a MSCI UK Quarterly Property Universe return of 0.9%.

Monthly interim dividends were maintained at 0.5p per share continued during the period, meaning the annual dividend is on course to remain at the 6.0p per share paid since 2006, providing a dividend yield of 5.4% based on the period-end share price.

BMO's total portfolio valuation fell by 3% to £1.4bn as the period saw the trust dispose of its Thames Valley Park 1, Thames Valley Park 2 and Building A, Watchmoor Park, Camberley properties, which were viewed as limiting future growth.

The FTSE 250-traded trust said it is preparing to recycle this newly acquired capital into advanced asset management opportunities that will provide long-term income and support future fund performance.

Though Brexit continues to cause headwinds to the UK property market, the company said it expected easier fiscal policy and low interest rates to provide some support in the coming months, with total returns anticipated to be in the low single-digits over the remainder of the year.

Martin Moore, chairman of BMO, said: "Notwithstanding the short-term pressures in the retail sector, the company has a well-positioned and resilient portfolio with exciting opportunities across many sectors to add value and deliver sustainable long-term rental income. Our efforts continue to be focused on delivering these over the months ahead."