BCPT up for sale amid ‘significant challenges’

Balanced Commercial Property Trust has launched a strategic review and invited takeover offers, its team pointing to “significant challenges” in the real estate market. The FTSE 250 REIT, the investment manager of which is Columbia Threadneedle, said in a stock market announcement that it had been lessening its exposure to the office sector in favour of industrial, but added that it faced “significant challenges with a difficult near-term economic and property market backdrop in a higher interest rate environment and the current dislocation in capital markets”. It said: “Despite the manager delivering steady portfolio performance over recent years, and the share price discount having narrowed, the company’s shares continue to trade at a material discount to their net asset value, which the board does not believe reflects the current value of the underlying property assets, nor the longer-term prospects of the portfolio.” The company’s shares are trading at a discount of roughly 30% to NAV. The board is launching a strategic review that will include looking at continuing attempts to narrow the trading discount, selling its portfolio, changing investment strategy, winding down the business and selling the company. It expects to announce the conclusion of the review in the third quarter of this year. Barclays is handing the sale process. Chairman Paul Marcuse 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.” Image by Oleg Gamulinskiy/Pixabay