6   July,   2021

Feature: Stephen Palmer in Investment & Pensions Europe (IPE)

UK open-ended property funds have been criticised in the mainstream press for gating their investors for long periods of time. The cash levels in these funds have risen steadily as assets have been sold and two long-suspended funds have recently announced they will re-open before the end of Q2 2021.

Looking ahead, the indirect investment team at DTZ Investors wondered if investors in UK property funds would benefit from an allocation to real estate equities, which are inherently more liquid than bricks and mortar. The analysis undertaken suggests that by allocating up to 10% of assets to UK real estate equities, UK open-ended property funds would have greater liquidity, investor returns could potentially be higher and there could be other potential benefits derived from enhanced diversification and flexibility. Moreover, a low portfolio weighting to real estate equities, allied with prudent stock selection, would minimise any negative impacts associated with equity market volatility.

Writing for Investment & Pensions Europe (IPE)Stephen Palmer, DTZ Investors asks:

Could RE equities provide the liquidity UK open-ended property funds need?

We believe they can and here’s why: