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 NPV17.0345.6538.37-18.2768.82Buy
Adams PLC Ord EUR0.01-51.43-10.531,093.51--Buy
Aew UK REIT PLC Ord GBP0.011.35--2.7094.57Buy
Alpha Pyrenees-83.00-98.52-99.6514,855.73-Buy
Alpha Real Trust Limited27.34105.8036.26-141.70Buy
Aseana Properties Ltd-14.429.5217.71--Buy
Belvoir Lettings PLC ORD 1P24.305.65---Buy
British Land PLC-23.0819.0863.14-891.00Buy
Camper & Nicholsons Marina Investments13.64-7.41-67.95-14.24Buy
Custodian REIT PLC Ord 1P3.69--2.31101.90Buy
Derwent London-28.0613.8088.83-3,598.00Buy
Dolphin Capital Investors-65.08-86.08-83.62-87.9044.00Buy
Drum Income Plus Reit-17.19--10.7693.90Buy
Duet Real Estate Finance Limited Ord41.78125.53148.62537.071.15Buy
Eastern European Property Ltd-7.97-35.97-28.87-51.21101.46Buy
Ediston Property Investment Company PLC Ord 1P-1.14---3.86107.79Buy
Empiric Student Property PLC12.57--10.12105.11Buy
European Real Estate Investment Trust Limited60.70164.4244.87-24.22225.00Buy
F&C Commercial Property-6.9324.9765.84-6.11134.10Buy
F&C UK Real Estate Investments Limited Ord 1P-0.4250.1883.01-3.7399.20Buy

ETFs

Name6 Months (%)1 Year (%)3 Years (%)5 Years (%)CurrencySector
DB X-Trackers FTSE EPRA/NAREIT Global Real Estate UCITS ETF 1C GBP19.1334.5347.85102.25GBXProperty - InternationalBuy
HSBC FTSE EPRA/NAREIT Developed GBP19.4334.9854.55114.53GBXProperty - InternationalBuy
SPDR Dow Jones Global Real Estate UCITS ETF GBP17.7132.4949.92-GBPProperty - InternationalBuy
iShares Asia Property Yield UCITS ETF GBP23.9245.9744.90105.54GBPProperty - AsiaBuy
iShares Developed Markets Property Yield UCITS ETF GBP20.5139.3663.44115.65GBPProperty - InternationalBuy
iShares European Property Yield UCITS ETF GBP20.0536.6464.92107.27GBPProperty - EuropeBuy
iShares UK Property UCITS ETF GBP-0.14-11.2928.4192.00GBPProperty - EuropeBuy
iShares US Property Yield UCITS ETF GBP20.8842.3279.33134.50GBPProperty - North AmericaBuy

VCTs

Name1 Year (%)3 Years (%)5 Years (%)NAVDiscountNDYSector
KW Europe Real Estate PLC Ord NPV-14.93--1,233.80-23.614.89Property - 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.