Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Property in 2013: what's hot and what's not

The property sector has had a challenging 2012 with both rents and capital values squeezed by the economic backdrop, and next year could again prove a rough ride.

Although central London will remain a favourite pick, asset management will be key in 2013, Michael Morris, chief executive officer of Picton Capital, the wholly owned subsidiary of investment company Picton Property Income, said.

In recent yearts, the central London boom helped to drive income from property up as growth in capital values became scarce.  Next year, buildings in the capital should maintain their popularity, but according to Morris, the gulf between London and the rest of the UK will narrow.

'In 2012 the story has been about central London.  There had been an increasing gap between London and other parts of the market being reflected in prices [but] I can see the relative performance from London being less acute than historically,' Morris explained.

Morris said the team has positioned roughly 50% of £180 million Picton to London and the South East, though expects asset management to become a vital skill that adds value in 2013.

However, Morris stressed that while incomes could remain under pressure because of the challenging economic environment, it is unlikely to be all doom and gloom for property investors, particularly in the closed-end space.

The sector's average discount stands at 7.1% and Picton's at 30.5%, which means investors have an attractiver entry point in comparison to open-ended space funds.

Transformation

Moreover, there are individual cases within the sector that add to this overall appear.

Picton has over the last year has been through a process of bringing the investment company's management in house and reducing refinancing risk.

This effort has started to pay off and although Picton Property Income announced a dividend cut in November from 1p to 0.75p per share, its income profit for the period rose to £6.9 million from £5.3 million last June. 

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Volatility is back, Europe's future & Ethical's key moment

Volatility is back, Europe's future & Ethical's key moment

This week’s episode of Investment Pulse takes a look at European prospects, FTSE volatility and whether public pressure is about to provide a push for ethical investment

Play Volatility spike: How ETFs can soften the blow

Volatility spike: How ETFs can soften the blow

ETFGI’s Deborah Fuhr discusses the role of ETFs in client portfolios during volatile market conditions

Play Winter market warmers, the post QE world and timing the Fed

Winter market warmers, the post QE world and timing the Fed

This week’s episode of Investment Pulse looks at the winding down of quantitative easing, whether to try and time a US Federal Reserve rate rise and if strong seasonal performers can reverse recent market slumps

Wealth Manager on Twitter