Fund manager Columbia Threadneedle looks set to lose its last UK real estate investment trust after Balanced Commercial Property Trust (BCPT ) put itself up for sale as part of a strategic review looking at the best options for its shareholders.

Paul Marcuse, chair of the £1bn generalist real estate portfolio, said the company was not in talks with any potential bidder and would consider other actions to narrow its 28% share price discount. These include selling some assets, returning capital to shareholders, changing investment strategy or fund manager or starting a managed wind-down.   

A continuation vote scheduled for the annual general meeting in June will be postponed until after the strategic review completes in the third quarter.

Marcuse said the board had been assessing the company’s options ahead of the vote having refinanced its £260m debt in September.

Fund manager Richard Kirby had sucessfully reduced BCPT’s weighting in offices and reinvested in higher-rated industrial properties, enabling the board in October to lift its monthly covered dividend by 10% to 0.44p a share.

While the 6.4%-yielding shares had rallied 24% in the past six months on hopes of falling interest rates, narrowing the discount from a low of 42%, they still traded materially below net asset value, severely undervaluing the portfolio’s prospects and making change necessary, Marcuse said.

While the company offered scale and good returns, it also faced ‘significant challenges’ from the ‘higher interest rate environment and the current dislocation in capital markets’.

‘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,’ he added.

In early trading the shares rose 3.2%, or 2.5p, to 81.5p against their estimated NAV of 109.5p, according to Winterflood Securities.

Over three years BCPT has generated total shareholder returns of 19%, including dividends, beating the 10% weighted average of UK generalist Reits. Over five years, however, they have underperformed, falling 13% against a sector average decline of 5%.

Excluding debts the company has net assets of around £750m with a market value of £554m before today’s share price rise.

BCPT became Columbia’s last UK Reit last year when CT Property merged with LondonMetric Property (LMP).