Standard Life Investments

Standard Life Investments Property Income Trust Limited

Mex ID: SEDOL: Reuters: SLI.L

Price
88.50
NAV
81.40
Premium/(Discount)
8.72%
Daily Price Change
-0.25p (-0.28%)
Change date
22/05/2017

Figures above are updated every business day after the close of trading and those displayed are to the close of the previous business day. Figures are shown in pence (GBP) and the data is provided by, and copyright @2016, FE.

General Trust Information

Objective

The companies investment objective is to provide Ordinary Shareholders with an attractive level of Income with the prospect of income and capital growth.

Profile

The companies investment objective is to provide Ordinary Shareholders with an attractive level of Income with the prospect of income and capital growth.The fund will acheive the investment objective by investing in a diversified fund consisting of UK commercial properties. The majority of the portfollio will be invested in direct holdings within the three main commercial property sectors of retail, office and industrial.

Fund Manager

Jason Baggaley

Jason Baggaley

Jason Baggaley, a qualified chartered surveyor, joined Standard Life Investments in 1996 and has over 17 years of real estate fund management experience. In addition to managing the Standard Life Investments Property Income Trust Limited, Jason also manages two major segregated property funds offering strong performance track records.

Awards

Moneywise Investment Trust Awards 2017 – Property Direct UK - Standard Life Investments Property Income Trust.

What Investment – Best Investment Trust for Income – Standard Life Investments Property Income Trust

Performance

Trust Performance (on a bid to bid basis)

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Past performance is not a guarantee of future returns. The value of investments may go down as well as up and you may receive back less than you invested. Your capital and income is not guaranteed.

Trust Performance & Returns

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Fund performance
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Fund performance
Sector performance

Past performance is not a guarantee of future returns. The value of investments may go down as well as up and you may receive back less than you invested. Your capital and income is not guaranteed.

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Monthly Valuation

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Performance (on a bid to bid basis)

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Trust Performance(on a bid to bid basis)

(on a bid to bid basis)
Fund performance
Sector performance
 Last 1 month*Last 6 months*Last 1 year*Last 3 years*Last 5 years*
Fund performance
Sector performance

Past performance is not a guarantee of future returns. The value of investments may go down as well as up and you may receive back less than you invested. Your capital and income is not guaranteed.

* Values to -

** n/a indicates that fund performance information is not available for this period due to the date the fund was launched.

Current details

All prices displayed in p (GBP). Figures below updated at am. Figures are provided by, and copyright @2016, FE on a delayed basis.
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LSE Announcements

Video

Jason Baggaley talks about investment trusts in general, the specifics around the Property Income Trust he manages and gives a short-term outlook for the asset class.

SLI Property Income Trust

How to Invest

How to Invest

Shares in Standard Life Investments' range of investment trusts are listed on the London Stock Exchange. As with any public quoted company, investment trust shares can be bought and sold on the stock market. This can be done through directly through a platform provider such as Standard Life or via a stockbroker, financial adviser or wealth manager.

We recognise professional financial advice is important before taking any investment decision. We recommend investors seek financial advice before taking any decisions. If you'd like to find an adviser in your area, take a look at www.unbiased.co.uk.

Alternatively, there are a number of platform providers who offer an online ‘execution only’ service, some of these are listed below.

You should note that by clicking any of the above links, you will leave Standard Life Investments' website and go to another website. We are not responsible for the content or accuracy of external websites.

The value of investments and the income from them can go down as well as up and is not guaranteed; an investor may get back less than their original investment.

Insight

Understanding the commercial property cycle

April 2017

Commercial real estate has always been a cyclical asset class. Understanding where we are in the cycle is as important as ever, especially given increased macroeconomic uncertainty following the UK’s decision to leave the European Union. A greater understanding of the property cycle may hold the key for investors seeking to overcome upcoming headwinds.

‘As well as the cyclical nature of real estate there is also a life cycle to the underlying assets. As investors, we have to understand both these cycles’ says Jason Baggaley, manager of the Standard Life Investments Property Income Trust (SLIPIT).

In the past, political influence has tended not to dictate the patterns of property investment. However, 2016 was strewn with surprises and we saw a much greater influence from the political environment, with the UK property market suffering in the immediate aftermath of the EU referendum. Commercial property values fell by 1.3% in 2016, according to the MSCI/IPD quarterly index, although the total return over 2016 remained positive at 3.5% given property’s reliable income return.

Although political and economic uncertainties remain, the fundamental characteristics of commercial property, and particularly its potential to provide a reliable and predictable income stream, make it a suitable asset class in which to invest in the current environment.

‘Commercial real estate can give a diversified, sustainable and predictable source of income,’ notes Baggaley. ‘One of the main things we focus on,’ he added, ‘is providing an attractive level of income. SLIPIT currently provides a dividend yield of around 5.5%, which is fully covered.’

Rental income is likely to shine through in the coming year and remain high enough to keep total returns on the positive side. Standard Life Investments forecasts an average annual total return of 3.8% per year for UK commercial real estate over the next three years, giving Baggaley added confidence. ‘The lease structure in the UK is very supportive of a healthy and predictable yield.’

For the veteran fund manager, simplicity remains the key to approaching real estate investments. ‘I’ve got a relatively simple investment approach. I like to invest in good quality assets, in good locations let to good tenants.’

Once the fundamentals are in place, focus then turns to generating sustainable yield. ‘Yield is important obviously. We firmly believe in having a covered dividend,’ says Baggaley, with SLIPIT aiming to deliver an attractive dividend with prospects for future growth.

Finding a pricing entry point is crucial to generating yield, however. Here Baggaley opts for a riskier approach. ‘I buy slightly shorter leases than the market average. A lot of people think that increases risk. [But] I’ve found that it gives you the opportunity to re-gear leases, particularly in times like this.’

Clients respond especially well to discussing lease renewals in a challenging economic environment, as it gives them the chance to focus on running their businesses rather than having to find, fit out and move to a new property. ‘Tenants would really like to get on with running their own affairs rather than moving, which is hugely expensive, time consuming and disruptive. We can maintain a high level of income, through shorter leases,’ claims Baggaley.

Harnessing debt provides another avenue to generate income. ‘We do have debt in SLIPIT, which is very attractively priced and has a huge benefit on the revenue account. Our all-in cost of debt is about 2.7% with an income yield from the portfolio of over 6%.’

Understanding the nuances of each asset also provides a valuable perspective on how to obtain growth. ‘We need to use the differences of each asset as a guide. We strive to use this bottom-up approach to ascertain how the investment is likely to perform. It is extremely important to understand what occupiers want, and to ensure we have assets that meet their needs. This is especially the case during periods of change, such as in the retail and home-delivery sectors, and in offices where the work environment is an important factor for companies wanting to recruit and retain talent.’

Despite the political risks ahead, Baggaley remains optimistic about the future. ‘There has been very little development of new buildings in most markets, and supply of good quality accommodation remains constrained. This supports continued prospects of rental growth, especially in the industrial sector, in which SLIPIT is overweight. Our view is that capital values are likely to be supported as well over the next couple of years by the healthy margin in real estate yields over bonds, and the likely ‘lower for longer’ interest rate environment in UK. The weaker pound has also maintained overseas interest in UK commercial real estate and it feels as though the immediate doomsday predictions in the summer of 2016 after the Brexit vote have been proved wrong. SLIPIT has performed very well up to this point and we believe it is well positioned for the future.’