The trust has sold an office property let to BT for £19.5m and will use more than half of the proceeds to pay down its debt. The holding was bought in October last year for £14.86m.
A statement by the trust’s board says: “Whilst new investment opportunities are being sought and appraised, the board and investment manager believe that, currently, greater shareholder value can be derived from utilising £10m of cash held in the security pool to repay debt.”
After the payment is made on April 16, the trust will save about £530,000 a year in interest. The debt repayment will see the fund’s net loan-to-value stand at 41.20%, based upon the independent property valuations as at 31 December.
Duncan Owen, head of property funds at Schroders, says: “The completion of the West Bromwich disposal crystallises a significant gain over acquisition cost for the company and allows us to reduce debt and the group’s interest costs.
“Following the debt repayment the company will be left with sufficient levels of surplus capital to consider making opportunistic new acquisitions, invest capital expenditure in accretive asset management of the existing portfolio and make possible further debt repayments.”