Date:-10-Feb-2010

Fundraising reveals enthusiasm for real estate
The largest UK commercial property investment trust will next week complete a £150m equity raising at a premium to net asset value in a further sign of investor enthusiasm in the real estate sector.

UK Commercial Property Trust, a £790m investment company listed on the London Stock Exchange, has placed 195m ordinary shares at a 6 per cent premium to NAV, demonstrating support from shareholders for new investment in a market that is bouncing back strongly.

Last year, more than £6bn was raised through rights issues and placings in the sector
However, almost all were carried out during the worst parts of the property cycle at deep discounts to NAV in order to generate emergency cash to cover debt positions

The fundraising by UK Commercial Property Trust was oversubscribed by investors. It was capped by Ignis Asset Management, the fund manager, in order to prevent a drag on returns from holding too much cash. The placing was done at a discount to the share price, which closed on Wednesday at 78½p. The placing also reflects the resurgence in the performance of the listed property trust sector. Listed companies were trading at discounts of more than 20 per cent to net asset values last year. By the close on Wednesday, the UK property sector was trading at a discount of just 4 per cent.

The UK property market finished last year in positive territory in spite of substantial initial losses, according to the benchmark IPD index on Wednesday. Total returns for the whole of 2009 were 3.4 per cent following record capital growth in the last quarter of 8.1 per cent.

Source: Financial Times