Over the year to date, returns have been muted across the market, although this is mainly due to capital falls in retail impacting positive performance from all other sectors. However, there is good reason to remain optimistic. Aside from retail, the rest of the market looks nicely positioned for positive performance over the next five years, dominated by the income return. Furthermore, with bond yields looking ‘lower for longer’, property will continue to offer an attractive income premium. Importantly, the BMO UK Property Fund has the reversionary potential to capture approximately 20% income growth.
A focus on retail
The rise of online shopping has prompted significant structural change within the retail sector. However, while some brands have struggled and are trimming their store portfolios, there are still some occupiers expanding. Guy and Emma believe the best line of defence is to hold assets in good-quality locations where occupier demand is likely to be resilient. The BMO UK Property Fund has one of the lowest exposures to the sector across its peer group, with a 6% exposure to the high street and 17% to retail warehousing. It has no exposure to shopping centres or department stores.
As the political uncertainty over Britain’s exit from the EU continues, the UK property market has seen a slowdown in decision-making, both from investors and occupiers. Investment volumes have been affected; however, a post-Brexit bounce is expected once the uncertainty is removed.
The fund maintains a consistent and sensible approach to liquidity management, underpinned by having the right long-term investors in the fund: advised clients from knowledgeable advisers. This, combined with a core long-term approach and liquid-sized lots, makes a market-leading approach.
A different approach: the right investors, the right portfolio, real returns
The BMO UK Property Fund invests in good-quality assets with sustained occupier demand, offering the potential for income growth. Its unique positioning with an in-house asset management team ensures that strong relationships with occupiers are maintained, and that opportunities to release growth potential are maximised.
Want to know more? Watch the full webinar.