Property

Introduction to Property

There are two main approaches to property investment. The first is to invest in property companies listed on the stock exchange, building a UK or globally-focused portfolio. The second is to invest in bricks and mortar, mainly via funds that own and manage commercial properties directly.

Each approach has different investment characteristics. For example, funds that invest in property companies will move more in line with conventional equity markets over the short-term. Equally, they may be more capital-growth focused, rather than yield-focused.

Bricks and mortar funds will offer greater diversification from conventional equity markets, but are also likely to be more focused on delivering a sustainable yield. However they are also less ‘liquid’ – managers of open-ended funds may not find it as easy to buy and sell the underlying holdings to meet investor redemptions. However this is not an issue that effects closed-end investment companies.

Property funds may specialise in high end 'prime' property, which usually proves more defensive in an economic downturn. Alternatively, they may focus on secondary property, which will be more vulnerable in a downturn, but may outstrip prime property in a buoyant market.

During adverse market conditions, some property funds can suspend withdrawals for periods of time (typically 6 months).

The tax treatment of investments is subject to tax law and HMRC practice which are subject to change. 

Investment Trusts

Name1 Year (%)3 Years (%)5 Years (%)DiscountNAV
AXA Property Trust Limited Ord NPV28.7776.0272.34-71.40Buy
Adams PLC Ord EUR0.01-40.74-23.81950.36--Buy
Aew UK REIT PLC Ord GBP0.013.69--1.6095.47Buy
Alpha Pyrenees-62.49-98.80-99.657,378.01-Buy
Alpha Real Trust Limited25.53117.1251.48-151.90Buy
Aseana Properties Ltd3.5715.3436.24--Buy
Belvoir Lettings PLC ORD 1P-5.71-33.04---Buy
British Land PLC-28.695.2439.53-891.00Buy
Camper & Nicholsons Marina Investments--28.95-49.32-15.90Buy
Civitas Social Housing PLC----98.00Buy
Custodian REIT PLC Ord 1P7.26--6.19101.70Buy
Derwent London-36.732.3356.90-3,598.00Buy
Dolphin Capital Investors-55.22-80.65-71.96-74.2229.09Buy
Drum Income Plus Reit3.07--8.7493.80Buy
Duet Real Estate Finance Limited Ord553.871,918.402,135.17-6.92Buy
Eastern European Property Ltd-0.74-34.52-28.37-49.90100.79Buy
Ediston Property Investment Company PLC Ord 1P3.89--0.64107.07Buy
Empiric Student Property PLC1.99--5.31105.40Buy
European Real Estate Investment Trust Limited37.1486.9739.77-26.89225.00Buy
F&C Commercial Property5.4333.7172.12-132.00Buy

ETFs

Name6 Months (%)1 Year (%)3 Years (%)5 Years (%)CurrencySector
HSBC FTSE EPRA/NAREIT Developed GBP9.3019.5248.6990.11GBXProperty - InternationalBuy
SPDR Dow Jones Global Real Estate UCITS ETF GBP8.0016.7944.89-GBPProperty - InternationalBuy
iShares Asia Property Yield UCITS ETF GBP16.5330.9943.8075.71GBPProperty - AsiaBuy
iShares Developed Markets Property Yield UCITS ETF GBP11.3322.7258.9592.37GBPProperty - InternationalBuy
iShares European Property Yield UCITS ETF GBP4.1917.8442.7082.55GBPProperty - EuropeBuy
iShares UK Property UCITS ETF GBP-10.03-17.5516.6072.16GBPProperty - EuropeBuy
iShares US Property Yield UCITS ETF GBP12.3023.5877.61111.08GBPProperty - North AmericaBuy

VCTs

Name1 Year (%)3 Years (%)5 Years (%)NAVDiscountNDYSector
KW Europe Real Estate PLC Ord NPV-16.45--1,201.90-18.304.95Property - Direct EuropeBuy

Disclaimer

Interactive Investor does not endorse any particular product. If you are unsure about whether an investment is suitable for you please seek advice from a financial advisor.