Page 7 - DIY Investor Magazine | Issue 33

There are also selected growth areas that have been weak, but should see an improvement; for example certain leisure assets and hotels with strong fundamentals.
‘WE SEE A CONVERGENCE OF SECTOR RETURNS WHERE STOCK PICKING WILL BECOME INCREASINGLY IMPORTANT’
TODAY’S PORTFOLIO
The UK Commercial Property REIT portfolio has benefited from a high weighting to industrial and logistics assets. From here we see a convergence of sector returns where stock picking will become increasingly important.
For example, we are looking at properties where we can reconfigure assets to source potential returns. A recent purchase of an office close to Park Royal in London, one of Europe’s most prized industrial/distribution locations, offers us the opportunity to redevelop the site to industrial after taking a good income yield from the existing asset.
This was a more compelling opportunity than buying expensive industrial assets in the same area.
We are also interested in building a higher weighting in operational assets, such as hotels, following our two student accommodation development funding projects in Exeter and Edinburgh due to complete later this year.
Within retail, the Trust’s focus is on discount and food anchored retail warehousing. Our most recent purchase in retail was a 140,000 square foot retail park close to the Trafford Centre in Manchester with a range of convenience retailers as tenants.
Our portfolio remains focused on those areas showing structural growth, or where the strategic management of assets can aim to improve returns. We believe the Company’s well-let portfolio of scale, heavily weighted towards performing sectors, and with share liquidity, should have a broad reaching appeal with potential for future earnings growth.
More information on UK Commercial Property REIT here >
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DIY Investor Magazine · Apr 2022