Vote on trust’s future

Aug 29 2007 by Tony McDonough, Liverpool Daily Post

SHAREHOLDERS at one of Britain's largest real estate trusts, the F&C Commercial Property Trust, are to vote on whether to preserve the trust or sell its assets.

A protracted period of poor share price performance relative to the net asset value of the £921m trust has forced lead managers Paul Herrington and Richard Kirby to convene an extraordinary general meeting (EGM) during which shareholders will decide its future.

Like many UK property stocks, the F&C Commercial Property Trust has been hit hard by increases in the costs of borrowing and equity market volatility.

The Trust, which was floated in March 2005, has been trading at a 5% plus discount to net asset value for the last 90 days.

This performance has triggered a clause in its prospectus compelling F&C to hold an EGM to debate the future of the trust. But directors of the trust said they did not expect shareholders to vote in favour of winding it up.

The announcement comes amid fears that conditions in the UK property market are likely to deteriorate further, prompting funds to consider whether it is in the best interests of investors to offload property assets before values fall.

The F&C Commercial Property Trust is the latest trust to suffer from a rapid downturn in investor sentiment towards UK property.