This unloved Reit is now a takeover target
Balanced Commercial Property Trust (BCPT) is a generalist real estate investment trust (Reit). This is another way of saying that it doesn't own one type of asset class, in the way Segro (SGRO) owns warehouses and Hammerson (HMSO) owns shopping centres, but a variety.
Tip Style
Growth
Risk rating
Medium
Timescale
Medium Term
Bull points
- Short-term momentum
- Trading on a hefty discount
- DiverseĀ mix of assets
- Strong rental income growth
Bear points
- Mistimed office salesĀ
- Disappointing track record
In fact,Ā BCPTās mix of assets almostĀ mirrors the 'average' ReitĀ portfolio, based on the holdings of the 35 largest Reits weighted by market cap. As such, it is a pretty good barometer for UK real estate as a whole. In good times, such as between 2009 and 2018, its share price has performed well. However, things took a serious turn for the worse this decade as first Covid-19 and then high interest rates hit the UK. Like many Reits, BCPT is now trading at a hefty discount to net asset value, which reflects the lower returns expected by investors.