LONDON, UK: The Balanced Commercial Property Trust Limited (BCPT) has announced a comprehensive strategic review to evaluate the company’s future and maximize shareholder value. Amidst a challenging economic climate and property market, the BCPT Board is considering various options, including a potential sale, although no discussions with buyers are currently underway.

Paul Marcuse, Chairman of BCPT, said: “Following a very challenging period for REITs during the Covid-19 pandemic and subsequent economic and geopolitical events, BCPT has been repositioning the portfolio away from less attractive sectors and realising cash to facilitate strategic options for the Company. We believe our monthly dividend offers an attractive level of regular income to shareholders.

We recognise, however, despite recent improvements in the Company’s share rating, the share price remains at a material discount to the Company’s net asset value. In line with our commitment to do the right thing for our shareholders as a whole, we have commenced this Strategic Review to determine the best way to enhance value for shareholders, after which the independent Board will determine the best way forward.

We welcome the views of all of our shareholders during this consultation period and will carefully take those opinions into consideration before announcing our next steps. The Company will continue to explore all options available to enhance value for its shareholders.”

Since its inception, BCPT has aimed to provide shareholders with both income and growth through a diversified UK commercial property portfolio. The company’s performance has been noteworthy, outperforming the MSCI UK Quarterly Property index across multiple time frames up to December 31, 2023.

In line with its progressive dividend policy, BCPT increased its monthly dividend by 10% in October 2023, boasting a 6.7% dividend yield as of April 12, 2024.

The company’s investment manager, supported by the independent board, has strategically reduced exposure to the lagging office sector, enhancing the industrial portfolio’s prominence. The upcoming annual report will shed light on these asset management decisions and the company’s ESG initiatives.

In a strategic financial move, BCPT secured a new debt facility to maintain its competitively priced L&G Loan while adding flexibility for future endeavors. This financial restructuring comes as the company prepares for a mandatory continuation vote in 2024.

The strategic review will explore all avenues, including portfolio sales, capital return, investment strategy shifts, or even a complete company sale under the City Code on Takeovers and Mergers. The Takeover Panel has permitted confidential discussions with potential buyers, exempting them from public identification and strict deadlines.

Interested parties are encouraged to engage with Barclays Bank PLC for expressions of interest. The BCPT Board emphasizes its right to modify or terminate the review process at any stage, ensuring the best interests of shareholders remain the priority. The outcome of this pivotal review is expected to be disclosed in the third quarter of 2024, followed by the crucial continuation vote.

This decisive period marks a significant juncture for BCPT as it navigates through economic headwinds and capital market dislocations, striving to reflect the true value of its assets and the long-term potential of its portfolio.

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