Standard Life Investments Property Income Trust (LON:SL) is an actively managed fund aiming to generate an attractive level of income, with the prospect of income and capital growth via direct investment in commercial property. Since mid-2014, the trust has grown significantly via acquisition; the most recent was a portfolio of 22 complementary property assets in December 2015. NAV total return has been ahead of the benchmark over one, three and five years. Following the EU referendum, similar to peers, SLI’s shares have moved from a premium to a discount to NAV, while its prospective yield of 5.9% ranks among the highest in the peer group.
Investment strategy: Active property investment
Managed by Jason Baggaley since September 2006, SLI invests directly in a diversified portfolio of commercial property. Asset management is a key element of the investment process, which typically involves negotiating new leases with existing or new tenants and refurbishments before re-letting. Historically, new leases are struck at higher rental levels, which increase the value of the underlying property. Unlike most industry participants, SLI collects its own rents, thus forming closer relationships with its tenants. As a result, it has a strong record of rent collection and a voids ratio of roughly half the industry level.
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