27 Oct 2021
TR Property - Overview
TR Property Investment Trust PLC Ordinary Shares Class GBP (TRY:LON) | 322 16.1 1.6% | Mkt Cap: 1,022m
TR Property (TRY) offers exposure to the property market via the equities of companies owning property. As such it has a number of key advantages over investment in a direct property investment trust. Manager Marcus Phayre-Mudge is able to be much more flexible and nimble in his asset allocation, and make medium-term tactical trades as well as longer-term investments. He can also more easily invest in alternative sectors of the property market when they are facing a strong outlook. Marcus also invests across continental Europe as well as the UK, which means he and his team have multiple levers to pull in search of alpha. He aims to take advantage of national and local business cycles as well as broader secular themes, but his investment decisions are built on rigorous stock-specific work. There is a tilt towards quality, as we discuss in the Portfolio section, which can be important to understanding relative returns. Over the past five years the trust has performed well versus its benchmark (see the Performance section) and outperformed in NAV and share price terms the average return in the AIC UK Commercial Property sector of direct property trusts. The bias to quality, to small caps and the small allocation to physical property all reduce the beta to the market, but this is more than offset by consistent levels of gearing. Despite the impact of the pandemic on the revenue account (a c. 24% reduction in FY 2021), the board raised the dividend over the past year and remain committed to doing so again as long as they believe the income will recover in the medium term and they have the reserves to do so – see the Dividend section. This is in contrast to the direct sector, where dividends on the generalist trusts are still mainly below their pre-pandemic levels. TRY trades on a small discount of 4% as of 21/10/2021.
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TR Property - Overview
TR Property Investment Trust PLC Ordinary Shares Class GBP (TRY:LON) | 322 16.1 1.6% | Mkt Cap: 1,022m
- Published:
27 Oct 2021 -
Author:
Thomas McMahon, CFA -
Pages:
7
TR Property (TRY) offers exposure to the property market via the equities of companies owning property. As such it has a number of key advantages over investment in a direct property investment trust. Manager Marcus Phayre-Mudge is able to be much more flexible and nimble in his asset allocation, and make medium-term tactical trades as well as longer-term investments. He can also more easily invest in alternative sectors of the property market when they are facing a strong outlook. Marcus also invests across continental Europe as well as the UK, which means he and his team have multiple levers to pull in search of alpha. He aims to take advantage of national and local business cycles as well as broader secular themes, but his investment decisions are built on rigorous stock-specific work. There is a tilt towards quality, as we discuss in the Portfolio section, which can be important to understanding relative returns. Over the past five years the trust has performed well versus its benchmark (see the Performance section) and outperformed in NAV and share price terms the average return in the AIC UK Commercial Property sector of direct property trusts. The bias to quality, to small caps and the small allocation to physical property all reduce the beta to the market, but this is more than offset by consistent levels of gearing. Despite the impact of the pandemic on the revenue account (a c. 24% reduction in FY 2021), the board raised the dividend over the past year and remain committed to doing so again as long as they believe the income will recover in the medium term and they have the reserves to do so – see the Dividend section. This is in contrast to the direct sector, where dividends on the generalist trusts are still mainly below their pre-pandemic levels. TRY trades on a small discount of 4% as of 21/10/2021.