Columbia Threadneedle’s CT Property Growth & Investment Fund is a hybrid real estate fund investing in both listed real estate securities across Europe (c70%) and physical UK commercial real estate (c30%).
Since the Fund’s launch 20 years ago, the real estate sector has seen periods of great opportunity as well as turbulence, however the outlook for 2025 appears to be one of optimism. On the Funds 20th anniversary, with peak interest rates having been reached, listed real estate looks set to outperform the sectors and geographies that the fund is actively targeting. This optimism can be put down to several factors, including the historic performance of the real estate sector throughout the last four cyclical peaks in interest rates[1]. After each peak, real estate equities enjoyed periods of meaningful outperformance relative to the wider stock market, which the Fund captured.
As well as looking forwards, to mark the Fund’s 20th anniversary, one of its managers, Marcus Phayre-Mudge, looks back at the key events in markets since the Fund’s launch, commenting: “Events such as the 2008 global financial crisis shaped the early days of the Fund and turned out to be an important stress test for our approach. I am pleased to say the strategy we developed passed with flying colours. In 20 years the fund has never closed to redemptions due to liquidity reasons and more than ever is fit for purpose in today’s investment universe.”
Commenting on changes seen within the Real Estate market, Marcus added: “The property market has undergone rapid transformation in the past couple of decades; the first UK REITs came into existence in 2007, high streets have come under pressure from online retail, and we have witnessed a corresponding boom for logistics and distribution assets. Another notable evolution has been the development and expansion of the ‘alternatives’ real estate grouping. In 2000 alternative assets were approximately 6% of the UK commercial real estate market, by 2020 this had grown to over 40%. Our weightings have similarly picked up and today we have positions in student accommodation, healthcare and self-storage providers, among others.”
Looking forwards, Marcus Phayre-Mudge remarked: “We continue to see value in the European retail space. In 2024 we selectively added to our holdings in this area, through investing in shopping malls in cities like Paris, Madrid, Rome and Barcelona. These, together with our investment in Supermarket Income REIT, have added more quality income generators to the Fund’s portfolio.”
“As we have already seen, in 2025, consolidation will remain a key theme for the UK sector. Through this activity, we have been able to lock-in profits in select names going through acquisition activity.”
“Our outlook for the property sector is positive, with income from real estate proving resilient, with the CT Property Growth & Income Fund yielding just over 4.5% per annum. We hope the CT Property Growth & Income Fund can continue to provide returns whilst also helping protect investors against uncertainty.”
Mike O’Toole, Head of UK Wholesale at Columbia Threadneedle Investments said: “The 20-year anniversary of the Property Growth & Income Fund is testament to hard work and expertise of all involved. The length of the team’s tenure speaks for itself with the consistency of the management team a key component of its success. We are proud that the Fund has continued to provide a steady source of income and capital growth, consistently delivering dividends to investors. This is down to the team’s active investment approach, based on fundamental research.”
“The Fund’s hybrid portfolio structure also allows it to combat the potential inability to transact quickly and efficiently, which remains a key consideration for clients when allocating to the asset class. We look forward to continuing to add value for investors in this fund.”
