BMO Commercial Property

BMO Commercial Property Trust Ltd - Trading update and NAV release

To:                   Company Announcements
Date:                27 July 2021
Company:        BMO Commercial Property Trust Limited
LEI:                  213800A2B1H4ULF3K397

Subject:           Trading update and NAV release for BMO Commercial Property Trust Ltd (the "Company”)


  • Net Asset total return of 5.3 per cent for the quarter ended 30 June 2021
  • Share Price total return of 29.6 per cent for the quarter ended 30 June 2021
  • Combined rent collection received to date for Q2 2020 to Q2 of 2021 at 90.3 per cent
  • Rent collection currently received to date for Q3 2021 of 90.5 per cent
  • As at 30 June 2021, the void rate was 1.9 per cent (2.4 per cent as at 31 March 2021)

Net Asset Value

The unaudited net asset value (‘NAV’) per share of the Company as at 30 June 2021 was 124.8 pence. This represents an increase of 4.4 per cent from the unaudited NAV per share as at 31 March 2021 of 119.5 pence and a NAV total return for the quarter of 5.3 per cent.

The NAV has been calculated under International Financial Reporting Standards (‘IFRS’). It is based on the external valuation of the Company’s property portfolio which has been prepared by CBRE Limited.

The NAV includes all income to 30 June 2021 and is calculated after deduction of all dividends paid prior to that date. The EPRA Net Tangible Assets (NTA) per share as at 30 June 2021, which is adjusted to remove the fair value of the interest rate swap, was 124.8 pence.

Analysis of Movement in NAV

The following table provides an analysis of the movement in the unaudited NAV per share for the period from 31 March 2021 to 30 June 2021 (including the effect of gearing):


Pence per share
% of opening NAV per share
NAV as at 31 March 2021 955.6 119.5
Unrealised increase in valuation of property portfolio 37.8 4.6 3.8
Movement in fair value of interest rate swap 0.1 - -
Other net revenue 10.8 1.4 1.2
Share buy-backs (5.5) 0.3 0.3
Dividends paid (8.4) (1.0) (0.9)
NAV as at 30 June 2021 990.4 124.8 4.4


The capital value of the Company's portfolio increased by 3.0 per cent over the 3 months. The industrial and logistics sector of the portfolio achieved another quarter of strong performance, increasing by 10.7 per cent. This reflected both further yield compression in the capital markets and the completion of two significant asset management initiatives as highlighted below.

The retail warehouse sector recorded its third successive quarter of increasing values with more liquidity and further evidence of transactional activity in the capital markets.

The Retail, hospitality and leisure sectors were more resilient this quarter as lockdown restrictions are lifted. St Christopher’s Place fell in value by 0.6 per cent and Wimbledon Broadway was unchanged over the period.

The valuation of the office portfolio increased during the quarter with West End Valuations improving as overseas investors seek to deploy capital into the sector. There were some valuation falls in the South East and regionally on those properties with shorter lease terms.

Share Price

As at 30 June 2021, the share price was 90.6 pence per share, which represented a discount of 27.4 per cent to the NAV per share. The share price total return for the quarter to 30 June 2021 was 29.6 per cent.

Rent Collection

We summarise below our current rent collection outcome since the impact of Covid-19 came into full force, from Q2 2020 to Q2 2021 as well as providing an update on collection for Q3 of 2021.

Q2 2020 to Q2 2021 Collection (billed between 26 March 2020 and 1 June 2021)

Overall collection for the fifteen-month period is at 90.3 per cent and the breakdown is detailed below:

Rent Billed Collected
(£m) (%)
Quarter 2 2020 16.9 85.1
Quarter 3 2020 16.5 90.0
Quarter 4 2020 16.3 93.8
Quarter 1 2021 16.5 89.9
Quarter 2 2021 16.2 92.8
Total 82.4 90.3

Collection by sector:

Rent Billed Collected
(£m) (£m) (%)
Industrial 16.9 16.2 95.3
Offices 35.2 34.3 97.6
Retail Warehouse 9.7 9.2 95.8
Retail 15.1 10.0 65.7
Alternatives 5.5 4.8 85.9
Total 82.4 74.5 90.3

Breakdown of uncollected rent:

Total Outstanding Rent Billed
(£m) (%)
Agreed deferments 1.0 1.3
Rent waived 3.2 3.9
Bad Debts 0.2 0.3
Monthly payments* 0.1 0.1
Unresolved / in discussion 3.4 4.1
Uncollected Rent 7.9 9.7

*  tenants who have been billed for the quarter but are paying in monthly instalments.

The resolution of historical rent arrears is progressing, and conversations are ongoing with tenants to reach an equitable conclusion. A supportive approach continues to be adopted with the occupiers affected. As previously disclosed, the significant proportion of uncollected rent is from the retail and leisure tenants at St Christopher’s Place Estate and Wimbledon, who have suffered particularly badly from the lockdown.

There is a cautious optimism, shared by new and returning customers and occupiers re-opening for business after the long period of enforced closure.

Q3 2021 Collection (due to be billed between 24 June 2021 and 1 September 2021)

The total quarterly rental payments for Quarter 3 amount to c.£16.5 million. The Company has billed £9.2m of its Quarter 3 rent due from 24 June to date and has collected 90.5 per cent of this total amount. The balance of rent will be billed on the relevant due dates during the course of July and August.

Collection by sector:

Rent Billed Collected
(£m) (£m) (%)
Industrial 2.4 2.3 95.9
Offices 3.7 3.6 96.3
Retail Warehouse 0.4 0.4 92.6
Retail 1.8 1.2 70.9
Alternatives 0.9 0.8 89.9
Total 9.2 8.3 90.5

Breakdown of uncollected rent:

Total Outstanding Rent Billed
(£m) (%)
Rent waived 0.3 2.9
Monthly payments* 0.1 1.6
Outstanding 0.5 5.0
Uncollected Rent 0.9 9.5

*  tenants who have been billed for the quarter but are paying in monthly instalments.

Trading Activity

St Christopher’s Place Estate

Footfall levels across the estate remain relatively strong compared with those being recorded for the wider West End.  Since the first release of restrictions from the last lockdown in April, footfall has hit 61% of average 2019 levels on the estate (the last comparable period pre-pandemic). This is ahead of the West End which has been averaging at around 40% but trending slightly below the national average of 67%.

The UK moved to ‘Step 4’ of the Roadmap out of lockdown, from 19 July, lifting the majority of restrictions.   Whilst this is a positive step for businesses, a meaningful return of office workers and international travellers is required to see pre-pandemic levels of activity. To aid recovery the Mayor of London has recently launched the ‘Let’s do London’ campaign, to encourage domestic visitors to enjoy all that London has to offer.

Since the last trading update, the estate has welcomed a number of new food and beverage outlets with Crome, Papa-dum and Sidechick all opening on James Street. Next month, ‘Isola’ by San Carlo will join the line-up and Emma Hyacinth will open in their new, larger store. There has also been a high level of activity within the estate offices with 5 new tenants or lease renewals being signed since the start of Q2. This activity underlines tenant demand for the estate and demonstrates how occupiers are seeing past the pandemic.


Two significant events completed over the quarter. At Alhambra House in Glasgow there was the completion of a lease extension with JP Morgan until 30 June 2023. The office building extends to c100,000 sq ft and for the period of the lease extension the annualised rent will be £2,500,000, an uplift of £500k on the passing rent.

At 17A Curzon Street in London there was the completion of a letting of the 2nd floor to MA Family Office Ltd. The new 5-year lease has a tenant break after the third year and a rent of £130,350 pa was agreed. The letting demonstrates the increase in occupier activity in major cities as restrictions ease.

Retail Parks

At Newbury Retail Park the Landlords works to combine units 3 and 4, creating a new larger 20,000 sq ft unit, with upgraded shop frontages, has completed and been handed over to the incoming occupier T J Morris t/a Home Bargains. Following over two years of outwards yield shifts, pricing of quality assets within the sector has started to improve. This is underpinned by rebased rents and resilience within this retail sub-segment which has been demonstrated throughout the pandemic. We are now seeing increased activity in the capital markets with UK institutions an active buyer in this space.

Industrial and Logistics

For the second quarter in a row performance was strong and dominated by two leasing events. Firstly, there was the completion of a lease re-gear with Kimberly-Clark at the 360,000 sq ft logistics facility at Revolution Park, Chorley. This was originally due to expire in June 2021, and the re-gear saw the tenant sign a new 12 year lease (with a break option at the end of the 7th year), and fixed annual uplifts of 2%, resulting in a valuation uplift of 32.3%. The second was the settlement of the rent review at a 270,000 sq ft facility in Hams Hall, Birmingham, Nestlé’s Purina pet food distribution hub. The review saw a sizeable uplift in the passing rent from £1.5million to £1.94million per annum, which in turn resulted in a valuation increase of 11.0% over the quarter. This had a positive capital impact upon the other two buildings held on the distribution park.        

Property Sales and Capital Receipts

In May the Company announced the disposal of a solus retail warehouse located in East Kilbride, Scotland for a total consideration of £19million, reflecting an increase of 7.2% over the last external valuation at 31 March 2021. The property is let to B&Q Limited for one of its large format stores on a lease due to expire in November 2029.

This sale is entirely consistent with the strategy of adopting a higher level of activity within the portfolio as the Company moves to recycle capital and adjust sector weightings.

The Company also received a capital receipt of £2.42million from the long leaseholder of a number of residential units at St Christopher’s Place as a result of the completion of a statutory lease enfranchisement process to extend the leases. This covered 24 flats located in Greengarden House subject to leases which were due to expire 2077 at nil rent. Under a statutory process the leases have been extended for a further 90 years until 2167.

Capital Expenditure

Having deferred uncommitted capital expenditure during the pandemic the manager is now actively working to bring forward a number of projects following the removal of restrictions.


Cash and Borrowings

The Company had approximately £56.2 million of available cash as at 30 June 2021. There is long-term debt in place with L&G which does not need to be refinanced until December 2024. The Company also has a Barclays £50 million term loan along with an additional undrawn £50 million revolving credit facility which is available upon the satisfaction of the relevant conditions to drawdown. The Barclays facility expires on 31 July 2022, with the option of two further one-year extensions. As at 30 June 2021, the Company’s net loan to value (‘LTV’) was 20.4 per cent.


The Company paid three monthly dividends at a rate of 0.35 pence per share during the quarter. The Company expects to continue to pay monthly dividends at this rate for the foreseeable future. There continues to be an improving outlook and the Board will monitor rental receipts and earnings closely and keep the dividend under review.

Share Buybacks

The Company commenced a share buyback programme during the quarter using some of the proceeds from the East Kilbride sale. 6 million shares were purchased over the period and the programme is ongoing.

Portfolio Analysis – Sector Breakdown

% of portfolio as at
30 June 2021
% like for like capital value shift (excl transactions)
Offices 520.2 41.2 0.8
West End 215.7 17.2 3.5
South East 72.9 5.8 -1.4
South West 30.5 2.4 -2.0
Rest of UK 181.7 14.3 -0.7
City 19.4 1.5 -0.8
Retail 191.1 15.2 -1.1
West End 165.0 13.1 0.3
South East 26.0 2.1 -9.2
Industrial 278.5 22.1 10.7
South East 29.5 2.3 1.6
Rest of UK 249.0 19.8 11.9
Retail Warehouse 145.1 11.5 4.9
Alternatives 126.7 10.0 0.7
Total Property Portfolio 1261.6 100.0 3.0

Portfolio Analysis – Geographic Breakdown

% of portfolio as at
30 June 2021
West End 439.8 34.8
South East 249.8 19.8
Midlands 181.1 14.4
North West 176.3 14.0
Scotland 142.1 11.3
South West 30.5 2.4
Eastern 22.6 1.8
Rest of London 19.4 1.5
Total Property Portfolio 1,261.6 100.0

Top Ten Investments

Properties valued in excess of £250 million
London W1, St Christopher’s Place Estate * Mixed
Properties valued between £100 million and £150 million
London SW1, Cassini House, St James’s Street Office
Properties valued between £50 million and £70 million
Newbury, Newbury Retail Park Retail Warehouse
Solihull, Sears Retail Park Retail Warehouse
Properties valued between £40 million and £50 million
London SW19, Wimbledon Broadway ** Mixed
Chorley, Unit 6 and 8 Revolution Park Industrial
Winchester, Burma Road Alternative
Properties valued between £30 million and £40 million
Manchester, 82 King St Office
Liverpool, Unit 1, G.Park Industrial
Daventry, Site E4, DIRFT Industrial

*  Mixed use property of retail, office, food/beverage and residential space.

** Mixed use property of retail, food/beverage and leisure space.

Summary Balance Sheet

£m Pence per share % of Net Assets
Property Portfolio 1,261.6 159.0 127.4
Adjustment for lease incentives (26.7) (3.4) (2.7)
Fair Value of Property Portfolio 1,234.9 155.6 124.7
Trade and other receivables 35.8 4.5 3.6
Cash and cash equivalents 56.2 7.1 5.7
Current Liabilities (26.2) (3.3) (2.6)
Total Assets (less current liabilities) 1,300.7 163.9 131.4
Non-Current liabilities (1.7) (0.2) (0.2)
Interest-bearing loans (308.6) (38.9) (31.2)
Net Assets at 30 June 2021 990.4 124.8 100.0

The next quarterly valuation of the property portfolio will be conducted by CBRE Limited during September 2021 and it is expected that the unaudited NAV per share as at 30 September 2021 will be announced in October 2021.

Important information

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service this inside information is now considered to be in the public domain.

Richard Kirby
BMO REP Asset Management plc
Tel: 0207 499 2244

Graeme Caton
Winterflood Securities Limited
Tel: 0203 100 0268