UK - The £680m Devonport Royal Dockyard pension fund has sold its £30m property portfolio due to its low diversification to risk.
The portfolio, with a yield of 7.25%, was sold to a private client through CB Hillier Parker Investors. It comprises retail, office industrial and retail warehouse properties in England and Scotland.
CB Hillier Parker Investors director Josh Dale-Harris said: “This decision emphasises the continuing trend by smaller pension funds not to invest directly in commercial property, in view of the difficulties of obtaining good diversification with sums of this amount.”
Other property experts believe that pension funds such as Devonport will find it easy to sell small property portfolios in the current climate.
Healey & Baker partner Phillipe Thibault said: “We are seeing an increasing number of high net worth individuals raising their exposure to the property markets in comparison with other investment classes. By placing their money in property they are finding that their investments compare favourably with current annuity rates.”
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