Darius McDermott, adviser to the VT Chelsea range of multi-manager funds, holds Reits in all four of the products on which he advises. He says the opportunity from his point of view was that the investment trusts in question began to trade at very wide discounts to their net assets, so he began to buy.
His view is that as bond yields have fallen, so the relative attractiveness of the income from property trusts increases, and people will begin to buy those, pushing the prices up and closing the discounts.
James Sullivan, head of partnerships at Tyndall, says: "We do not currently source explicit property exposure in our models, choosing to have some look through access to the likes of British Land and Land Securities through much broader, more diversified UK plays.
"Property via an open-end structure has no place within a retail friendly portfolio due to the liquidity mismatch. However, property via a close-ended vehicle such as an investment company or a Reit would form part of any regular sector appraisal, albeit, remains arguably a thin end of the wedge.
"Many property trusts trade on very material discounts to their net asset values as the market sentiment remains somewhat negative. This may be an opportunity for some to collect ‘prime’ property on handsome yields, but the opportunity cost of waiting for a re-rating whilst the rest of the market runs hard can be quite hard to stomach.
"The direction of travel for property markets remains opaque due to the lack of visibility on both the economy and monetary policy in the short term, paired with the work from home phenomenon that is now commonplace."
David Thorpe is senior investment editor at FT Adviser
