Broker rates F&C-managed TR Property Investment Trust 'buy'

Tom Tuite Dalton, contributing analyst at Oriel Securities, rates the F&C Investment-managed TR Property Investment Trust 'buy' due to its attractive income, simple structure and experienced management.

The £667 million trust is a UK-based investment company, listed on the FTSE 250 index, and invested in pan-European equities and directly in UK property. One of its largest equity holdings is French property company Unibail Rodamco.

Tuite Dalton says: "The recent pull-back in UK and European property shares has brought yields back to more interesting levels and TR Property Investment Trust's managers [Alban Lhonneur and Marcus Phayre-Mudge] are confident that UK base rates will stay low and that [the trust's] dividend can continue to grow ahead of inflation."

The trust's management notes that good quality property companies have seen their cost of finance fall in recent years, such that debt refinancing can lead to enhanced future returns.

Tuite Dalton adds: "Banks have not stopped lending but simply become more selective, they argue. We expect demand for real assets (of which indirect property shares are at the more liquid end of the real asset spectrum) to strengthen as world growth proves muted, deposit rates stay low and inflation lingers."

The analyst concludes: "We would not be surprised to see this trust move to a premium: TR Property Investment Trust's simple structure, large size, long-term record, active bottom-up approach, and impressive dividend-growth history should prove attractive to a growing number of investors over time."

Over one year, TR Property Investment Trust has returned 37% compared with 25.8% in the IT Property Securities sector as 10 September.