Market's view on Balanced Commercial Property Trust

Published on April 2024

  • Concerns are raised about the high costs associated with vacancy levels in properties, highlighting an instance where a low vacancy level still resulted in a £2.5 million loss in income.
  • Discussions are ongoing regarding the financial sustainability and strategic direction of a company considering its high refinancing costs and the potential need to reset dividend payouts in light of new loan agreements with high-interest rates.
  • The possibility of winding down the company or selling assets to cover debts is debated, with suggestions that selling assets above Net Asset Value could help close the NAV discount.
  • A strategic review of the company is seen as a potential expense that could burn funds, with alternative suggestions including putting the entire portfolio on the market.
  • The performance of a company’s office holdings continues to drag down its financial results, with particular difficulties in regional office markets and those on shorter leases.
  • There are discussions about the company’s excessive exposure to offices in Aberdeen, questioning the strategic placement of such investments.
  • The company’s dividend sustainability post-2024 is questioned, with calculations provided to assess whether the dividend could be maintained given the projected interest charges and rental income.
  • Concerns are raised about the potential risk of a recession and its impact on the London office market, which could affect dividend coverage and the overall financial health of the company.
  • A detailed review of refinancing options is noted, with the company securing new debt facilities to manage existing loans, though the terms and costs associated with these are scrutinized for their long-term viability.
← Back to Home