The Lemon Fool

Good morning,

Feel this could be a silly question but let’s see. I’ve been struggling to find any pure U.K. residential property plays. RESI is mixed, PRS is build to rent and probably comes closest but i’m not overly keen on the development risk. Are there REITs / funds i’m missing? Perhaps my ‘googling’ skills have failed me.

Plenty of commercial property options but with the tax changes occurring for buy to let held personally I thought there’d be more of these fund alternatives springing up.

I started looking at this as big apartment blocks appear to be yielding 5-6% in London and 6-9% in other U.K. cities from eyeballing the Allsop catalogue. Throw in some leverage which is cheap at the moment and you’ve got a REIT i’d Interested in - 5% dividend back by inflation linked assets.

Thanks for any thoughts.

All the best,

I think nearly all of the residential reits came from housing associates - there's Mountview estates that mentions assured shortholds in amongst its mix.

Maybe its not such a good investment opportunity though, prices seem to be flatlining for residential (at least round here) and property is sticking to agent's books. I imagine most non-HA residential is going to be held privately and other REITs will have exposure to more than one property asset class.

One that springs to mind is Grainger. According to its most recent results, Grainger is the UK's largest residential landlord. It's not a company that I follow. From its most recent results:

"We continue to successfully execute our strategy to invest in high quality new rental homes for the mid-market across the UK in target cities, with an operational portfolio of over 8,400 rental homes and a further c.8,200 new homes in our pipeline. Our strategy is designed to enhance shareholder returns by delivering a step change in our net rental income and thereby support strong dividend growth."

https://www.investegate.co.uk/grainger- ... 00041846Z/

https://corporate.graingerplc.co.uk/investors.aspx

Thank you both; I really appreciate.

I particularly like the look of Gainger and so have my weekend reading planned. Low dividend yield but high dividend cover so will have to check what’s going on there.

On U.K. residential as an asset class I share and understand your concerns however I plan to dollar cost average into this similar to my approach to equity ETFs. My general view is ‘anything but cash’ in the medium term as it looks like central banks are once again about to start rate cutting cycles.