Columbia Threadneedle plans office sale to improve Balance

Columbia Threadneedle is looking to sell offices from its £1bn Balanced Commercial Property Trust, after returns fell by 23%. Announcing its half-year results, chair Paul Marcuse said: “The main drag on performance has been the portfolio’s exposure to the office sector, particularly select regional office markets and those buildings on shorter leases.” As a result, its manager was “reviewing the portfolio weighting and is actively looking to further reduce the company’s office exposure”. Offices currently account for just under 30% of the total portfolio. CT’s Richard Kirby and Dan Walsgrove, the trust’s managers, said: “The recovery of the real estate markets will be driven by select growth sectors and we have established a capital reallocation strategy to reduce the portfolio’s exposure to the office sector. A number of assets have been targeted for disposal and we are proactively seeking to focus strategy on key growth sectors and assets as we align the portfolio to deliver long-term relative outperformance.” The trust, which owns St Christopher’s Place off Oxford Street, W1, saw a net asset value total return of 0.8% for H1 2023, down from H1 2022’s 11.7%. The portfolio delivered a total return of 1.5% over the first six months of the year, outperforming the MSCI return of 0.3%. This was driven by a capital return of -1.1%, better than the index return of -2%, while an income return of 2.6% was above the index at 2.3%. NAV per share dropped slightly over the six months from 118.5p to 117.5p CT said the share price discount to NAV stood at 43.5% at the end of the period, adding: “The negative sentiment towards the real estate sector continues to affect the rating of the shares.” To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews