Standard Life Investments Property Income Trust Ltd (LON:SLI) is managed by Jason Baggaley. He aims to deliver an attractive level of income with the potential for income and capital growth from a diversified portfolio of UK commercial property. The manager notes that the industry is in a period of change, such as in the office sector, where tenants are demanding a higher level of service from their landlords. Baggaley says that SLI is embracing and benefiting from the changing environment, continuing to forge strong relationships with its tenants. He is cautiously optimistic about future returns from UK property and is building on his positive long-term performance track record. SLI’s NAV total return has outperformed its IPD Monthly Index Funds (quarterly version) benchmark over the last one, three, five and 10 years. The trust offers an attractive 5.0% dividend yield.
Investment strategy: Actively managed portfolio
Baggaley seeks “good properties, in good locations, with good tenants”. SLI’s portfolio is primarily invested in the three main UK commercial property sectors of industrial, office and retail. The manager actively manages SLI’s properties, such as renegotiating mutually favorable leases and refurbishing units, which builds strong relationships with the trust’s tenants. As a result, SLI has a current record of 100% rent collection within 21 days and a below-industry level of voids. The trust’s loan-to-value ratio is currently very low versus history (14.3% at end-March 2018), as the manager has realized profits on some of its holdings and is patiently looking for attractive investment opportunities before reinvesting the proceeds.
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