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29 Feb, 2008

Published: 10:05 Friday 29 February 2008
By: David Campbell, Investment Reporter

The net asset value of the Invesco Property Income trust fell more than 15% during the second half of 2007 and by 10.1% in the last quarter of the year alone.

While the fund has recovered from the NAV discount of 72.6% which it was trading at around the turn of the year, it is still priced down 47.6% compared to its portfolio value.

The company came perilously close to breaking its bank covenants on gearing levels last year, following a miss-timed entry into the French property market.

It has since agreed an extension on the terms of its borrowing, providing it with more time to sell £100 million of properties to bring its borrowing back within agreed limits.

In agreement with its creditors, the trust has committed to bring its loan-to-value down from 68.9% of assets to 55%within the next 12 months.

As of 31 December, the trust held assets worth just over £4.5 billion, down from £4.9 billion at the end of September, its quarterly update revealed.

The dividend for the quarter remained unchanged from last year at 1.6875p per share.

The two largest single holdings in France are the Le Directoire office block in St Cloud, with 21,620 square meters of office space worth 10% of the portfolio, and the St Michels Orge logistics warehouse valued at 5% of the portfolio.

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