/ PROPERTY TRUSTS /
Sweeney thinks the property
investments that will do well over
the coming years are those that
specialise in a particular area. He
likes investment company Tritax
Big Box, which develops large-
scale logistics and distribution
locations across the UK. “Industrial
warehouse space is hot property
at the moment because of the shift
away from the high street towards
online shopping,” he says.
Assets owned by the trust,
which yields around 4.25
per cent, include a 550,000ft 2
warehouse in Peterborough used
by online retailer Amazon and
an Argos distribution facility in
Staffordshire.
LET THE HALLS
Another popular area of
investment is student
accommodation, which is
booming thanks to the rising
numbers of young people going
to university and the low supply
of appropriate living quarters.
GCP Student Living, which
yields almost 4 per cent, owns
teaching facilities and student
accommodation across the
country, such as a 588-bedroom
building in east London, which
also includes retail space, and a
153-bedroom building in Bristol.
Medicx, which focuses on
healthcare infrastructure, is a
favourite of Ben Yearsley, director
at Shore Financial Planning. The
trust owns 157 primary care
buildings in the UK, including
doctor’s surgeries and medical
practices. It yields 6.7 per cent
from rental income while also
benefiting from the rise in the
value of its assets.
18
“Open-ended
property funds
should be a thing
of the past. They
are not fit for
purpose”
Gary Millward, financial
consultant at Alan Steel Asset
Management, is a fan of TR
Property Investment Trust, which
invests in a mixture of bricks &
mortar and company shares.
He likes that the trust invests
outside of the UK as well, and is
currently tapping into the growing
popularity in Europe of shopping
centres that offer an entire day out,
housing cinemas, restaurants and
leisure activities as well as shops.
It has made 20.64 per cent over the
past year and yields 3.1 per cent.
CONCENTRATION RISK
Despite all of the issues, investors
still have more than £25bn
invested in property funds,
according to the latest figures
from the Investment Association.
The sector is often a popular
choice because investors feel that
they understand the asset class.
However, experts say that this
can lead to concentration risk,
particularly among older investors
who may have a considerable
proportion of their wealth tied up
in property.
Shaw says: “If you already own
your own home, then investing
in residential property can mean
you are overexposed to the sector,
so you need to make sure you are
investing in something that isn’t
directly correlated to the value of
your house.”
While many of the issues
with the property sector were
highlighted last year, the asset
class can still play an important
role in many investors’ portfolios:
it provides much-needed
diversification from other assets
such as bonds and equities, and
can also produce a reliable income
stream – which is particularly
appealing to investors who have
entered retirement.
“A lot of people may be spooked
about the property market but, at
least in uncertain times and when
inflation is high, you have the
protection of owning a physic