• UK Real Estate Hero
  • The trust aims to deliver an attractive level of income together with the potential for income and capital growth from investment in a diversified UK commercial property portfolio. It offers investors prime exposure to commercial property assets.

  • How to Invest

    Open an F&C Savings Plan

    Call: 0800 136 420

    Invest online now

    The value of your investments can go down as well as up, and you may not get back what you originally invested.

  • Share Price

    104.00p +p

      

Key facts

  • Key Information Document (KID)

    ISIN Trust name Currency English
    GB00B012T521 F&C UK Real Estate Investments Limited  GBP KID

    Key points

    This trust offers exposure to a diverse portfolio of UK commercial property and a high level of income is paid quarterly. Investors can gain exposure to an asset class that is usually not accessible, via a readily realisable vehicle.

    Fund facts
    Investment manager F&C Investment Business Limited
    Launch date 1 June 2004
    Total assets £349.54 million (as at 30.09.17)
    Currency Sterling
    ISIN GB00B012T521
    SEDOL B012T52
    Key dates
    Annual general meeting  
    Year end 30 June
    Dividend payment date(s) March, June, September and December
  • Fund manager commentary

    Total returns for the UK property market as measured by the Investment Property Databank (IPD) Quarterly Universe benchmark were 2.5 per cent in the third quarter of 2017. The annual total return improved to 9.6 per cent with capital values up 1.4 per cent over the quarter. The annual income return remained stable at 4.7 per cent over the year to September.

    The quarter was characterised by a lack of substantive progress and continued uncertainty regarding the Brexit negotiations, with public division within the conservative party and weaker forecast growth giving the chancellor little room to manoeuver in the annual budget. Monetary policy was unchanged over the quarter but the first upward adjustment in interest rates was made just post-period with inflation having risen to a five-year high. Economic growth has been supported by the depreciation of sterling, and resilient consumer spending, there are however signs that the latter may be fading as real incomes are squeezed. Gilt rates moved higher during the quarter but remain low by historic standards.

    Property investment activity has recovered since the referendum-induced dip, with volumes above both the 2016 level and the long term average driven by overseas investors investing net £9bn in the first three quarters of 2017. Institutions remain net sellers and local authorities particularly acquisitive. Inflows to retail property funds were positive for most of 2017 but August saw net redemptions.

    The Industrial and Distribution sectors have continued to drive market performance and remain the top performing subgroups over the year by some distance, followed by Alternatives. Offices outside London and the South East and Retail Warehousing recorded quarterly improvements with Shopping Centres still performing particularly poorly. Rental growth was unchanged from the previous quarter at 0.5 per cent for All Property, with strong outperformance by Industrials in the South East against offices and retail.

    The Company portfolio returned 3.3 per cent over the quarter, with total returns of 11.2 per cent over the year (outperforming the IPD Quarterly Index of 9.6 per cent over the same period), driven by a top quartile annual income return of 5.8 per cent. Active management at the retail warehouse located at Northfields Park Rotherham and the central London mixed used property at 24 Haymarket resulted in these two assets being the top performers over the quarter. The Company’s best performing assets over the year were the Industrials, exclusively located in the South East. The initial yield on the portfolio is 5.2 per cent and the average weighted unexpired lease term is 6.3 years. The portfolio remains well-balanced both geographically and by sector split, with meaningful representation in the Manager’s target markets including a 60 per cent weighting to the South East, and just over 30 per cent exposure to Industrials by sector.

    During the quarter the Company completed the acquisition of a freehold industrial property located on Lister Road, Basingstoke, single let to a strong financial covenant for 9 years. The price of £9.56m reflected a yield of c.5.2 per cent. Post period the Company disposed of the single let shop unit at 100a Princess Street, Edinburgh for £3.35m, a small premium to valuation. Generally there is a high level of equity in the market however there are signs that buyers are becoming far

    more discerning in stock selection. Long-term secure income remains prized by investors, as do Alternatives such as healthcare and hospitality with pricing in these markets reflecting the depth of demand.

    Despite the political headwinds the UK Property Market has delivered a solid performance over the twelve months to September with total returns split broadly equally between income and capital. While there is undoubted a marked difference between the health and the prospects for the various subsectors pricing still offers an attractive yield margin against other asset classes and has been supported by historic low interest rates.

    As at 30 September 2017

  • The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market movements. Past performance is not a guide to future performance. When you sell your shares, you might get back less than you originally invested. If markets fall, gearing can magnify the negative impact on performance. A fund investing in a specific country carries a greater risk than a fund diversified across a range of countries. The value of property related securities are likely to reflect valuations determined by professional valuers. Such valuations are the opinion of valuers at a particular point in time and are likely to be revised. Property and property related assets can sometimes be illiquid.
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  • Peter Lowe

    Peter Lowe

    Fund Manager

Past performance is not a guide to future results. The value of investments can go down as well as up.

Information in this section of the Website is directed solely at persons who are located in the UK and can be categorised as retail clients. Nothing on this website is, or is intended to be, an offer, advice, or an invitation, to buy or sell any investments. Please read our full terms and conditions and the relevant Key Information Documents (“KID”) before proceeding further with any investment product referred to on this website. This website is not suitable for everyone, and if you are at all unsure whether an investment product referenced on this website will meet your individual needs, please seek advice before proceeding further with such product.

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