AEW UK REIT (AEWU) joined the London market in 2015 and has been the best-performing trust in the rapidly dwindling UK commercial property sector since then, with an annualised NAV return of around 9%. It owns a sectorally diversified portfolio of around 30 to 35 properties, which it actively manages, historically completing an average of two acquisitions and two disposals a year. AEWU adopts a value-based approach, aiming for a net initial yield of between 7% and 10% on any purchase plus the potential for rental growth. Its property portfolio is valued at just over £200m, so the average lot s...
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Custodian Property Income REIT (ticker: CREI) was launched in 2014. An initial portfolio of around 50 UK property assets has now trebled in size to around 150 which is diversified by both region and sector but has a particular focus on smaller properties valued at less than £10m. CREI's portfolio is valued at just under £600m and it has around £170m of debt, mostly at fixed interest rates and with staggered maturity dates. The trust has a market cap of about £340m and trades at a discount of around 20%, a little wider than its three-year average of 15%. CREI raised its dividend from 5.25p in 2...
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Balanced Commercial Property Trust (ticker: BCPT) was launched in 2005 raising around £735m of equity and £230m of debt to buy a portfolio of around 30 UK commercial properties. Since its IPO, it has been run by Richard Kirby and it is now part of the Columbia Threadneedle stable. After paying a 6.0p per share dividend from 2006 through to 2019, albeit only partly covered by earnings, COVID led to a short-term dip in rents received so the payout was cut by more than half to 2.85p in 2020. As rental collection recovered, the dividend rose to 4.25p in 2021 and then 4.7p in 2022, being fully cove...
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abrdn Property Income (ticker: API) was listed in 2003, making it one of the oldest property trusts on the London market, and it has been run by Jason Baggaley since 2006. It holds a diversified UK real estate portfolio consisting of 45 properties valued at around £400m. Just over half the portfolio consists of industrial properties, with the remainder in a mixture of office, retail, and alternative uses. Around two-thirds of its rents are agreed at open market values and its average remaining lease length is around six years. API has used a modest level of gearing for the last ten years, typi...
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My notes this week include a link to my video about what the charts are suggesting and a disturbing prediction by the Swiss investor Felix Zulauf, whose track record when judging the market cycle has been exemplary in my experience. Following Alastair Laing's stint on the podcast last week, Nick Greenwood and Peter Hewitt will be on the next two weekly podcasts. Sebastian Lyon, the manager of Personal Assets and CEO of Troy Asset Management, has also been booked for a future Q and A. This week you can also find links to both the latest Investment Trusts Handbook and an interview about its co...
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Value And Indexed Property Income (ticker: VIP) has reinvented itself in the last eighteen months. It used to be mostly invested in high-yielding stocks with a UK commercial property portfolio on the side. Now its focus is almost entirely on direct property ownership although it also invests in some listed property trusts. The property side of VIP has been managed since 1986 by OLIM, which is led by the very experienced team of Matthew Oakeshott and Louise Cleary and this part of the trust has an impressive performance record of 12.2% annualised over the last 35 years. It's a small trust with ...
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AEW UK REIT (ticker: AEWU) has been the best performing trust in the Property: UK Commerical sector in recent years and has returned just over 11% annualised on a net asset value basis since its 2015 IPO. It has a diversified approach when it comes to both regional and sector allocation although it currently has a heavy bias toward industrial, which makes up just over half of its portfolio. AEW UK looks to buy cheap properties with relatively short leases and rents that are agreed at open market values rather than being inflation-linked. It also seeks to be an active investor and a number of i...
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Launched just under five years ago, LXi REIT is one of the new breed of specialist property trusts. Rather than specialising in a single industry, it seeks out UK commercial properties that can be leased for at least 20 years until their first break clause and that have inflation-linked or fixed rental uplifts. Since its IPO, LXi's net asset value has compounded at 12.0% a year, well ahead of its 8% minimum target. While LXi did have to reduce its dividend a little due to the pandemic, it's rebounded strongly since and a 5% increase has been pencilled in for the year ending March 2023. On 20 J...
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Supermarket Income REIT's 2017 IPO looks to have been very well timed. Increased demand for grocery services arising from the pandemic has helped drive rental yields steadily lower and therefore asset prices higher. Supermarket Income REIT has expanded its portfolio to 35 stores plus a share in a joint venture that owns a further 26. It targets larger omnichannel stores, i.e. those that offer delivery and in-store purchases, with the vast majority of its rental income contracted to rise in line with inflation. It's currently a member of the Money Makers income portfolio and has just this week ...
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