abrdn Property Income Trust – Ready and waiting

Negative investor sentiment towards the commercial real estate sector appears to be behind the discounts to NAV among REITs and listed property companies remaining excessively wide, including abrdn Property Income Trust (API). This is despite a large valuation correction at the end of 2022 and transactional evidence of value stabilisation. API’s manager says that a re-rating of the sector and API’s shares should be triggered by market indications that interest rates have peaked, so promising inflation data for June was encouraging, it adds.

For API’s manager, the focus continues to be on growing income, and on that front it has carried out several asset management initiatives within the portfolio, especially within its office portfolio, that has seen its vacancy rate drop to below 5%. Additional rental reversion potential across the wider portfolio may encourage further positivity.