Fund manager commentary
Property Market Overview
The UK property market delivered a total return of 0.8% in Q4 2012, to give a full year out-turn of 2.7%. Capital values fell by 0.7% in the quarter, having been consistently, if modestly, negative throughout 2012. Rental growth was flat for the fifth successive quarter. A disappointing UK economic performance, concerns about the global economy and sovereign debt worries affected sentiment for much of 2012, although there were some signs of stabilisation as the year drew to a close. Central London has out-performed the regions, helped by strong inflows of capital from overseas and the office market was the strongest performer among the three main property
The property portfolio produced a total return of 1.0% during Q4 2012, and returned 3.7% for the full year. Capital values trended negative and the portfolio value fell by 0.6% over the quarter and 3.1% over the full year. During the quarter, 14 Berkeley Street, London, W1 was the largest contributor to relative performance returning 3.4%, as a result of the continued strong investment market and the building becoming fully income producing following its refurbishment. Keens House, Andover, let to LloydsTSB until 2076 was the best performer returning 4.4%, as a result of further inward yield movement. Despite the turbulent economic conditions affecting business especially in the retail sector, the void rate on the portfolio remained low at 2.5% compared with IPD benchmark average of 9.1%. The average weighte
As announced to the market on 7 February 2013, the Boards of IRP Property Investments (‘IRP’) and ISIS Property Trust (‘IPT’) reached agreement on the terms of a recommended merger of the entire assets of IRP and IPT. Extraordinary General Meetings for both Companies will take place on 11 April 2013 to vote on the proposal.
As at 31 December 2012
The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market movements. Past performance is not a guide to future performance. When you sell your shares, you might get back less than you originally invested. If markets fall, gearing can magnify the negative impact on performance. Changes in rates of exchange may have an adverse effect on the value, price or income of investments. Emerging Markets, Unquoted Companies and Smaller companies carry a higher degree of risk and their value can be more sensitive to market movement; their shares may be less liquid and performance may be more volatile. The fund may invest in hedge funds or private equity funds which are not normally available to individual investors, exposing the fund to the performance, liquidity and valuation issues of these funds. Such funds typically have high minimum investment levels and may restrict or suspend redemptions or repayment to investors. The asset value of these shares and its prospects may be more difficult to assess.