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F&C’s commercial property trust aims to fill portfolio gap

F&C is setting up a 965m closed-end property trust which it says will be the biggest listed property trust launched in the UK.

The F&C commercial property trust will be registered in Guernsey with its shares listed on the London Stock Exchange. It will have an initial target yield of 6 per cent, with dividends paid quarterly. There is an annual management fee of 0.75 per cent.

The portfolio will include 30 UK properties, with the trust expected to have an initial gearing of 25 per cent, which the managers hope to use to boost performance as new opportunities emerge.

F&C Property Asset Management managing director Paul Herrington says investors who want to get exposure to property do not not to wait for the Government to introduce US-style real estate investment trusts.

He thinks that commercial property rather than residential property is the missing ingredient in many investors’ portfolios.

Herrington says: “We are watching the Reit story with interest but there is a chance that they may never even see the light of day. Where investors are lacking exposure is commercial property. We anticipate gains in the sector of 10 per cent during 2005.”

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