The £1 billion UK Commercial Property Trust, managed by Ignis, has reduced both its fees and its dividends.
The trust’s dividends have been reduced by 30% to 3.68p a year; this would equate to a yield of 4.8%, compared with the present 6.9%.
The fund explained that this would make its distributions more sustainable, taking its dividend cover from 70-80% to more than 100%.
Ignis has also cut its management fee for the trust by 7% to 0.65% of total assets.
‘With the re-positioning of the portfolio carried out during 2013 and following a detailed review of dividend policy, I believe the re-based dividend level from Q1 2014 is a sensible and prudent decision that will set a sustainable base for the future performance of the company, balancing an attractive level of income with a solid total return,’ said Christopher Hill, the trust’s chairman.
Managed by Robert Boag, the trust predicted that it would deliver a total return of 11% for 2014. Over the past three years it has returned 21%, in line with its sector’s average.