SLI’s UK Commercial Property Trust ponders deployment of £130m war chest

The £1.1 billion trust, which is the biggest in the sector and came under the control of the Edinburgh-based investment arm of insurance giant Standard Life following its takeover last year of Glasgow-based Ignis, produced a net asset value total return of 5.2 per cent in the first half of 2015,

That performance lagged a 6.2 per cent advance in its benchmark but beat the three per cent rise in the all-share index.

New manager Will Fulton who oversees the platform with a core team of four spread “between Glasgow and Edinburgh ”, said: “Everyone has settled in very well at Standard Life and the team is enjoying the new environment.”

Mr Fulton hailed the extra resource of a dedicated retail property team at SLI which boasts a four per cent dividend yield against a 2.8 per cent average in the sector.

He explaind: “We have sold £133m of stock, a large part of that in the retail portfolio, assets which over the short and medium term we do not think will perform well,” he added.

Mr Fulton said: “More of our return is going to be coming from managing assets, looking after them and growing that income.”

He said the trust had healthy exposure to regional assets, while the advent of Crossrail could help push up rents from £35 to £50 a square foot at its latest central London office investment at Liverpool Street.

In Edinburgh, the trust has picked up from Aviva the site in George Street occupied by ESPC and Waterstones, enabling it to market upstairs offices while letting the retail space to Clydesdale Bank for its banking superstore in the capital.