UK Commercial Property REIT slashes quarterly dividend

UK Commercial Property REIT slashed its quarterly dividend as it worked to continue rent collection during the Covid-19 pandemic on Monday, .

The FTSE 250 real estate investment trust said it had low gearing, and “significant” cash and capital resources, and halved its quarterly dividend to 0.46 pence per share.

Executives agreed to reduce their own fees by 20% for the rest of this year, and to keep all other costs and capital expenditure commitments under review.

UKCM said its portfolio valuation as at 31 March was £1.29bn, which represented a 3.1% like-for-like decline in valuation after capital expenditure adjustments from 31 December.

It said it was in a strong financial position, with a “robust, lowly geared” balance sheet and significant financial resources available of £154m. That comprised uncommitted cash of £54m after allowing for future capital commitments and the May 2020, dividend plus £100m available from its revolving credit facility.

“Together, these resources provide the company with significant liquidity and flexibility at both a corporate and portfolio level,” the company said.

It added that had received 68% of advance payments due for the second quarter of the year as "tenants are constrained in their ability to trade during the lockdown". Of the 32% rent outstanding, 12% was derived from the industrial and office sectors - both areas in which the firm said it was more confident of recovery.

The payment rate was continuing to rise and the investment manager was in talks with tenants to look at alternative rent solutions from deferral of repayment to rent rebates in return for extensions of leases.

Net gearing was around 13%, based on a 31 March valuation, and cash held at the same date. UKCM said it had three facilities in place, as well as over £480m of unencumbered property as at 31 March, providing further headroom and flexibility.

At 0932 BST, shares in UK Commercial Property REIT were up 0.011% at 60.21p.