WP - UK REITs: Building Back Better - Capital Access Group

The UK REIT sector offers an interesting selection of both generalist and specialist strategies, whether seeking to unlock under-appreciated value, deliver sustainable, future-proofed buildings, or serve the needs of specific types of occupier with strong long-term fundamentals. In this note we argue that at current valuations, REITs may offer a significant opportunity for investors with a medium-term horizon.

UK commercial property has been a cornerstone asset for many income seeking investors in recent decades, particularly since the global financial crisis of 2007/8 and the resulting ultra-low interest rate environment. However, since rates began to rise in 2022 to tackle surging inflation, meaningful returns have once more become available on lower-risk assets such as cash and government bonds, which has led to a retrenchment from alternative income assets such as property.