SLI Property Income trust forecasts 10% dividend rise

The managers of the £68.1m trust say it has a prospective dividend yield of 7.3% based on its share price this week, compared to 3.2% from the FTSE All Share index.

The trust paid total regular dividends of 4p per share for 2009, and a special dividend of 0.25p per share distributed in February.

This year, the UK commercial property trust will pay three dividends each of 1.1p per share, starting in May.

The board says this reflects "confidence in future earnings resulting from recent purchase activity together with the strong revenue reserve position".

David Moore, the trust's chairman, says its £25m of cash reserves leaves it well placed to take advantage of suitable buying opportunities.

"The board remains confident that the company is in a strong position to enhance income returns...by continuing to purchase attractively valued properties."

Jason Baggaley, manager of the six-year old vehicle, predicts UK commercial property will provide "low double-digit returns" for three to five years.

He adds: "Commercial property pricing looks fair value compared to bonds. The rationale of buying property for a sustainable, and predictable income return, remains intact."

The trust's shares rose by 29.8% to 64.5p last year, but have fallen by 5.5% to 59.5p this year.

Last year, they hit a low in March of 26.75p, leaving the trust trading at a discount to NAV of about 50%. This week the trust's shares have traded at a premium to NAV of around 6%.

Categories: Property Investment

Tags: Standard life

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