Real estate still carries the negative associations of the sub prime debt, which was one of the underlying factors behind the global financial crisis in 2008. But there are signs that the sector is being rehabilitated as investors return, drawn by the potential for both income and capital gain.
The portfolio is invested 70.1% in REITS, 17.6% in property companies and 12.3% in developers.
Fund selectors asked about the range of discount to net asset value on the fund. Tiltman said discounts were always a concern and understanding them was important. “But we take a three to five year view and look at the long term value of assets, as well as sales momentum. We don’t trade on sentiment. We try to separate the noise from the assets and hope the investors do the same.”
Another selector asked if there was still a lot of leverage left in the sector. “It depends where,” said Tiltman. “There is still some in parts of the US and Canada, but not much in UK or Europe. We think 30-40% is appropriate, no more.”
“This is a liquid Ucits 3 fund which can take advantage of a sector where location is the diversifier. There are always opportunities somewhere in the world.”