UK - Commercial property will continue to offer pension schemes attractive returns and a stable capital base over the short to medium-term, Standard Life Investments predicts.
The fund manager says institutional investor interest in its commercial property-based property income trust underlines its forecasts.
The Standard Life Investments Property Income Trust – which has just completed the £6.5m acquisition of 2-4 Bucknall Street in London – has closed to new investors with a total investment of £186m. SLI says this figure is significantly higher than its original estimation.
Investment director Andrew Jackson said: “We are positive on the outlook for commercial property in the UK and believe it will continue to provide investors with a stable capital base and an attractive level of income for the next few years.”
The freehold building comprises a 16,800 sq ft former Victorian Warehouse which has been fully refurbished to provide contemporary style offices. The property is let to advertising agency, Mustoes, for a term of 15 years from June 6, 2003.
The £93.5m portfolio that backed the fund at launch consists of UK commercial properties, diversified across sectors as well as geographically with 48% in the office sector, 42% in retail and 10% in industrials.The fund is targeting an annual gross dividend yield of 6.5% on issue price.
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Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers