The UK property has had a tough year. The problems for commercial property sparked by the pandemic are yet to be fully alleviated – and may not be for some time – while residential property is suffering due to higher borrowing costs and the cost of living crisis.
However, for investors prepared to look past the doom and gloom, there are a number of UK Real Estate Investment Trusts trading at deep discounts that may provide long-term value.
Triple Point Social Housing REIT (59% Discount)
The Triple Point Social Housing REIT develops and rents social housing across the UK. They develop specially designed properties to meet the needs of vulnerable people. Their ambition is to be the leading UK supported housing investor while providing investors with an investment with a measurable positive impact.
As of 31st December, the portfolio’s NAV was 109.06p per share, up from 108.27p a year prior. Shares are currently trading at 50.75p.
The trust paid 5.46p dividends in 2022 equating to a 10.5% yield at the current share price. The trust is highly geared at 40%.
Urban Logistics REIT (26% Discount)
Urban Logistics manage a portfolio of logistics assets that facilitate the ‘last mile’ deliveries to homes and businesses across the UK. Their assets are located across the UK close to transport infrastructure including ports and motorways. The trust has made a number of recent acquisitions including assets from Columbia Threadneedle Street which encompasses properties in Southampton and Rugby. Their tenants include Volvo and Amazon.
As of 30th September, the portfolio’s NAV was 184.54p per share. The current share price is 140.75p. Investors will watch for their upcoming report and any updates to NAV.
The current yield is around 5.4% and gearing is 15%.
Balanced Commercial Property Trust (28% Discount)
The Balanced Commercial Property Trust is a diverse portfolio of UK commercial property including retail/restaurants, office spaces and logistics units.
The FTSE 250 constituent’s largest holding is St Christophers Place near Oxford Street. The trust recorded 15% decrease in NAV in the last quarter primarily due to the revaluation of logistics assets. The trusts rental collection has rebounded to around 98% after a dip during the pandemic.
NAV per share was 118.5p per share as of 31st December.
The trust has a 5.4% yield and 25% gearing.