A property fund to buy now

Listed real-estate companies and commercial property funds such as TR Property offer a buying opportunity, says Max King.

Commuters at a railway station
Workers are still returning to the offices in the City
(Image credit: © Wiktor Szymanowicz/Anadolu Agency via Getty Images)

What is wrong with the property market? The fortunes of the sector are well illustrated by the dismal performance this year of commercial property fund TR Property Investment Trust (LSE: TRY). This £1.4bn real-estate investment trust invests primarily in the shares of property companies, with 62% of assets in Europe and 41% of these in the UK, plus 7% in direct UK properties (the excess 10% represents borrowings.)

Around 65%-70% of the trust’s portfolio has inflation indexation built in, says manager Marcus Phayre-Mudge. The dividend has grown at 8% a year for the last decade. Yet the trust’s shares have fallen 45% this year. They yield 5.2% and stand at a discount to net asset value (NAV) of 9%. Many of its underlying holdings also trade at significant discounts.

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Max King
Investment Writer

Max has an Economics degree from the University of Cambridge and is a chartered accountant. He worked at Investec Asset Management for 12 years, managing multi-asset funds investing in internally and externally managed funds, including investment trusts. This included a fund of investment trusts which grew to £120m+. Max has managed ten investment trusts (winning many awards) and sat on the boards of three trusts – two directorships are still active.

After 39 years in financial services, including 30 as a professional fund manager, Max took semi-retirement in 2017. Max has been a MoneyWeek columnist since 2016 writing about investment funds and more generally on markets online, plus occasional opinion pieces. He also writes for the Investment Trust Handbook each year and has contributed to The Daily Telegraph and other publications. See here for details of current investments held by Max.