Complete your registration today for a chance to win £50 John Lewis vouchers in our weekly draw Enter now
Fund Profile

Disclaimer

This is a non-independent marketing communication commissioned by Columbia Threadneedle Investments. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
CTPT: a nimble approach to secular growth themes in UK property…
Overview

CT Property Trust (LON:CTPT) has a mandate to invest in a diversified UK commercial property portfolio with a strong thematic element guiding the portfolio construction. The portfolio is predominantly focused on the industrial and retail warehouse sectors, both sectors of the property market where, as we discuss in the Portfolio section, there is tenant demand, rents are relatively affordable, assets are straightforward to adapt and maintain, and achieving ESG standards is more practicable than it may be with other property assets. CTPT’s portfolio is predominantly based in the south-east of England.

Manager Matthew Howard has been running CTPT since July of 2022, but he has been a fund manager in the CT Real Estate Team for over five years, and during this time has managed a segregated mandate of a similar size to CTPT, with a very similar strategy and portfolio. This mandate has won a number of performance awards under Matthew’s leadership.

CTPT is geared c.22% LTV, which is relatively conservative for the UK Commercial Property peer group, and its main refinancing event is due at the end of 2026. It currently has c.£30m of cash on the balance sheet, and could also draw on a further £20m from its credit facility in order to make new acquisitions, having paused on this during 2022 as property valuations started to fall. The trust used some cash in 2022 to make share buybacks but has also paused on this recently.

CTPT pays fully covered dividends quarterly, and at the current share price the historic yield is 6.3% , compared to the yield on the 10 year gilt of c.3.7%. It trades at a 35% discount.

Analyst's View

After some big valuation declines across the UK property sector, CTPT’s recent Q1 NAV is one among a number of signs that that valuations may have reached a floor. This may not be true in some more troubled sectors, with regional offices springing to mind, but CTPT is predominantly exposed to sectors with strong fundamentals such as affordable rents, good reversionary opportunities and good tenant demand. As a result, although interest rate risks remain a consideration, CTPT’s current yield of 6.3% and discount to NAV of 35% look potentially good value for a long-term investor.

CTPT’s focus on smaller assets with values below £15m gives it the advantage of greater flexibility and the potential to exploit regional markets, and Matthew expects that over time he may find further opportunities across the UK regions, whilst maintaining the south east bias. This focus does not mean CTPT isn’t able to capture bigger trends in the UK commercial property market. For example, over the long-term CTPT has shifted out of traditional retail assets to focus on retail warehouses and industrial and logistics warehouses. Both of these are crucial sectors undergoing strong demand while there is relatively limited supply. Smaller assets do not mean that CTPT’s tenant base is necessarily more risky than others in its peer group, with many national chains being natural tenants for the types of assets that CTPT owns. CTPT also has a good amount of cash available to take advantage of lower valuations.

Bull

  • Property valuations are potentially at a floor
  • CTPT is positioned in dynamic sectors of the property market
  • Attractive dividend yield and discount

Bear

  • Further interest rate rises could stall a recovery in property values
  • Refinancing in 2026 may put dividend cover under pressure
  • Gearing can amplify negative as well as positive returns
Continue to Portfolio

Fund History

31 May 2023 Dazed and confused
Property discounts remain stubbornly wide. Why is that and what would make them start to narrow?
12 May 2023 Fund Analysis
CTPT: a nimble approach to secular growth themes in UK property…
17 Aug 2022 Fund Analysis
CTPT’s new manager is aiming to boost growth and its already high yield…
04 May 2022 Time to change the record
We ask whether equities can still offer meaningful diversification or whether investors need to turn to alternatives…
20 Apr 2022 On the hunt
We review discounts in the investment trust space against a backdrop of harsh conditions...
02 Mar 2022 Spread 'em!
We explore how much dispersion in returns of stocks drive the differing fortunes of trusts…
12 Jan 2022 Bargain hunt
We survey the discount opportunities in the market and update on the performance of our Discounted Opportunities Portfolio…
01 Dec 2021 How to protect your portfolio from inflation
We highlight trusts which could appeal in an environment where 'transient' inflation is here to stay...
10 Nov 2021 Fund Analysis
BREI’s discount looks attractive and may not last given the 4.7% yield…
24 Feb 2021 Fund Analysis
BREI offers an attractively high yield from a wide discount…
10 Jun 2020 Pick your poison
We discuss the compromises between yield, value and security in the property sectors…
10 Jun 2020 Fund Analysis
BREI trades on one of the widest discounts in its sector despite strong performance and a defensive bias…
16 Oct 2019 Life on Mars: could inflation take us back to the '70s?
We discuss two potential catalysts for inflation - and the assets that could offer a hedge against it...
16 Oct 2019 Fund Analysis
BREI offers a yield of 5.9% and a track record of income growth...
View all

Welcome to Kepler Trust Intelligence

Please enter a valid email address
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid email address
{{item.msg}}
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
{{item.msg}}
Please enter a company name
{{item.msg}}
Please enter a location name
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a platform
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a trust
{{item.msg}}
?
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
{{item.msg}}
Please select an option
{{item.msg}}
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
{{item.msg}}
Please enter your first name
{{item.msg}}
Please enter your last name
{{item.msg}}
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid password
{{item.msg}}
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.