UK Commercial Property Trust (UKCM) aims to generate an attractive income with the potential for income and capital growth from a diversified portfolio of commercial property. Manager Will Fulton has focused the portfolio on sectors and locations benefitting from structural changes in the economy and society. Recently, the company announced that it is seeking permission from shareholders to widen the manager’s universe into additional real estate sectors which would allow him to expand on that strategy. Will explains these “alternative” sectors are now regarded as mainstream and include healthcare, student housing, hotels, car parks, pubs, petroleum and automotive and the commercially-managed private residential rental sector, amongst others. Representing an increasing share of the commercial property investment market Will believes they can be attractive as they are driven by demographic, urbanisation and trends in technology, together with a stability of income returns and diversification benefits, an environment he believes is set to continue. UKCM yields 4.2%. While this is below the sector average, the portfolio has strong reversionary income potential and one of the lowest levels of gearing in the peer group. The company has also extended its borrowing facilities to be able to take advantage of opportunities emerging from what the manager anticipates could be a volatile property market. The trust trades on a wider discount than the peer group, although the absolute number and the discount to the peer group have both narrowed in recent months. Currently it is trading on a 6% discount compared to a sector average of 4%. Last July the trust gained REIT status, which means it is treated as a UK resident for tax purposes and will remain exempt from corporation tax on the profits and gains from its property rental business, protecting shareholder’s income.