Which Property IT or share?


#1

Apart from a significant cash holding, my portfolio is totally invested in equities and I feel that it is time for some diversification. I am very uncomfortable with bonds and am looking at property, not private residential but industrial, commercial or student accommodation. Has anyone any suggestions for IT’s or stocks ?


#2

Are you looking to invest in property for income, diversification or growth @Shetland ?

I like TR Property, though it’s mainly a property securities trust, that is, it invests in the shares of property companies Europe wide, though they also own a few large properties direct in the UK.

I like a couple of specialist property funds like Target Healthcare , which owns health centres, so has the defector backing of Government. It yields over 5%, but it always trades on a premium, currently 15%

Another interesting one is Drum, it’s small, is on a premium but it’s come down a lot following the issuing of new shares, and it has a handsome 5%+ yield.


#3

I am more concerned with growth than income but yield is always nice. Diversification is the main objective as my portfolio is totally equities and I feel I need to add something else and bonds are not viable right now.


#4

Thanks for the suggestions. I have made investments in

Target Healthcare - Care homes
Empiric - Student lettings
Regional Reit - Varous commercial outside London and SE
Primary Health Properties - Health Centres

I am still looking for other suggestions. I don’t want anything in London or SE


#5

Keep in mind that most property investment vehicles are geared so they tend to be much more volatile than bonds over the medium term. UK Commercial Property IT are a plain vanilla fund with low gearing and are thus lower risk.

Quite a few of those you have bought are trading at a premium to the underlying assets so you must expect medium term growth to be limited. If you reckon that the outlook for the UK economy as a whole is OK (and a bet on the regional markets tends to be predicated on that) then you might want to take a look at Hansteen who at least have good & experienced management. If on the other hand you are bearish on the UK then Secure Income REIT and Ground Rents Income Fund also trade at a premium but the underlying assets should hold up better in any general downturn.