Specialist Real Estate Investment Trusts (REITs) focused on ownership and development of high-quality real estate in growing niches, represent a financially sound holding for investor portfolios, providing reliable income. But finding the right REITs is key.
In February, only six UK listed real estate companies delivered positive returns and three in particular stand out for Matthew Norris, investment adviser, Gravis Advisory, adviser to the Gravis UK Listed Property fund.
The best performing property company was Unite Group, the largest listed owner and operator of purpose-built student accommodation in the UK, returning 3.29%.
The group reported that the business “has seen a strong recovery in performance in 2021 and is well positioned for further growth”. Unite pointed out that it now has its “biggest ever development pipeline and the balance sheet capacity to pursue new growth opportunities”.
Norris said: “Successful delivery of this pipeline is likely to deliver significant future earnings growth and attractive total returns for shareholders.”
Next, within the digitalisation mega trend, Segro – a leading owner and developer of modern warehousing across the UK and continental Europe, reported increased “strength, breadth, and depth of occupier demand”.
Norris said: “Record leasing activity drove a 4.9% like-for-like growth in rental income and a 10.0% growth in the total dividend per share. This growth was coupled with a new high in the level of investment activity focused on securing future profitable growth.”
He highlighted that with the tailwinds of continued growth in e-commerce and improving supply chain resilience Segro issued a very positive outlook statement, “we enter 2022 with considerable confidence in the outlook for the business and its ability to deliver continued growth.”
Then finally, Primary Health Properties, a leading owner of modern GP surgeries, declared its 26th consecutive year of dividend growth, increasing its proposed annual dividend by 4.8%.
“This impressive long-term track record underlines the strong fundamental characteristics of this sub-sector and the benefit of receiving government-backed rental income,” said Norris.
The REIT highlighted that it looks forward “to 2022 with confidence in our ability to create further stakeholder value”.