Investors remain cautious about UK REITs, while private equity is acquiring them. According to Cris Sholto Heaton, one of these views must be incorrect.
Most UK real estate investment trusts (REITs) trade at significant discounts to their net asset value (NAV), with shares still lower than they were a decade ago. This is despite consistent solid operating updates from key players.
There are concerns about certain subsectors, such as the oversupply of lower-grade offices, which are only suitable for redevelopment due to new energy-efficiency standards or changing work patterns.
One view must be wrong, says Cris Sholto Heaton
The author suggests that either investors are missing the obvious or the market is, as commercial property seems to be at a crossroads.
Author's summary: UK REITs may be poised for a rebound.