Page 8 - DIY Investor Magazine | Issue 33

UK COMMERCIAL PROPERTY REIT (UKCM) YEAR END 2021 RESULTS PRESENTATION
Important information
Risk factors you should consider prior to investing:
• The value of investments and the income from them can go down as well as up and investors may get back less than the amount invested.
• Past performance is not a guide to future returns.
• The value of property and property-related assets is inherently subjective due to the individual nature of each property. As a result, valuations are
subject to substantial uncertainty. There is no assurance that the valuations of Properties will correspond exactly with the actual sale price even
where such sales occur shortly after the relevant valuation date.
• Prospective investors should be aware that, whilst the use of borrowings should enhance the net asset value of the Ordinary Shares where the
value of the Company’s underlying assets is rising, it will have the opposite effect where the underlying asset value is falling. In addition, in the event that the rental income of the falls for whatever reason, including tenant defaults, the use of borrowings will increase the impact of such fall on the net revenue of the Company and, accordingly, will have an adverse effect on the Company’s ability to pay dividends to Shareholders.
• The performance of the Company would be adversely affected by a downturn in the property market in terms of market value or a weakening of rental yields. In the event of default by a tenant, or during any other void period, the Company will suffer a rental shortfall and incur additional expenses until the property is re-let. These expenses could include legal and surveying costs in re-letting, maintenance costs, insurance costs, rates and marketing costs.
• Returns from an investment in property depend largely upon the amount of rental income generated from the property and the expenses incurred in the development or redevelopment and management of the property, as well as upon changes in its market value.
• Any change to the laws and regulations relating to the UK commercial property market may have an adverse effect on the market value of the Property Portfolio and/or the rental income of the Property Portfolio.
• Where there are lease expiries within the Property Portfolio, there is a risk that a significant proportion of leases may be re-let at rental values lower than those prevailing under the current leases, or that void periods may be experienced on a significant proportion of the Property Portfolio.
• The Company may undertake development (including redevelopment) of property or invest in property that requires refurbishment prior to renting the property. The risks of development or refurbishment include, but are not limited to, delays in timely completion of the project, cost overruns, poor quality workmanship, and inability to rent or inability to rent at a rental level sufficient to generate profits.
• The Company may face significant competition from UK or other foreign property companies or funds. Competition in the property market may lead to prices for existing properties or land for development being driven up through competing bids by potential purchasers.
• Accordingly, the existence of such competition may have a material adverse impact on the Company’s ability to acquire properties or development land at satisfactory prices.
• As the owner of UK commercial property, the Company is subject to environmental regulations that can impose liability for cleaning up contaminated land, watercourses or groundwater on the person causing or knowingly permitting the contamination. If the Company owns or acquires contaminated land, it could also be liable to third parties for harm caused to them or their property as a result of the contamination. If the Company is found to be in violation of environmental regulations, it could face reputational damage, regulatory compliance penalties, reduced letting income and reduced asset valuation, which could have a material adverse effect on the Company’s business, financial condition, results of operations, future prospects and/or the price of the Shares.
Other important information:
Issued by Aberdeen Asset Managers Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom. Registered Office: 10 Queen’s Terrace, Aberdeen AB10 1XL. Registered in Scotland No. 108419. An investment trust should be considered only as part of a balanced portfolio. Under no circumstances should this information be considered as an offer or solicitation to deal in investments.
Find out more at www.ukcpreit.com and register for updates here. You can also follow us on social media here: Twitter and LinkedIn. GB-290322-168383-1
DIY Investor Magazine · Apr 2022 8