Fund Profile


Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by TR Property . The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

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TR Property (TRY) owns a portfolio of pan-European real estate equities, supplemented with a small physical property portfolio. TRY’s lead manager is Marcus Phayre-Mudge, who aims to invest in high-quality property companies supported by strong bottom-up and top-down fundamentals. His approach is sensitive to valuation, and he uses the flexibility afforded by investing in equities (rather than directly into property) to tactically tilt the portfolio – sometimes swiftly - as the investment outlook changes over time.

This flexibility has been useful during the pandemic. Having benefited from his long-standing overweights to high-quality sectors as the initial impact was felt, once the vaccine rally got underway Marcus was able to rotate into some more cyclical stocks before taking profits and rotating back into logistics and high-quality residential plays which had lagged. As we discuss in the performance section, TRY has handsomely outperformed its index and the direct property trust peer group over the short and long term.

TRY pays an interim and final dividend each year and maintained its interim in line with last year’s despite the impact of the pandemic. As we discuss under dividend, we believe the board is in a strong position to use reserves to maintain the final dividend if they so wish. TRY yields 3.4%.

TRY’s shares trade on a discount of 6.8%, which is significantly narrower than the generalist direct property trusts, but closer to the average 7% of the AIC Europe equity sector. Marcus typically runs the trust with a significant level of gearing, and on a net basis, currently 17%, reflecting how attractive he sees the current opportunity set despite the impact of COVID-19.

Analyst's View

There are clearly structural issues in retail property, and the outlook for offices is contingent on how companies and workers will react to the end of lockdowns. We think one of the key benefits of investing in property via equities, as TRY does, is the liquidity and flexibility that allows the manager to tactically tilt the portfolio, react to events and trade changing valuations. This is impossible for a physical property portfolio manager given the long lead times for buying and selling assets. TRY’s pan-European remit gives the manager a very broad opportunity set to invest in.

In the short to medium term, TRY looks to be in a strong position to maintain its dividend, and Marcus tells us he is confident the portfolio’s income will return to pre-pandemic levels in 2022 given what he is seeing from portfolio companies. It is possible to receive a higher historic yield on a direct property investment trust at the moment, but the uncertainty of the outlook for their income accounts is, we think, reflected in their much wider discounts, which makes a lower portfolio income translate to a higher share price yield.

In our view, TRY is an excellent way to get diversified property exposure and we think it interesting that Marcus is currently running a significant level of gearing despite the macroeconomic uncertainty, and we think this reflects a real bullishness on his part.

bull bear
A strong track record of outperformance versus benchmark
Invests mainly in shares not physical property, so tends to be correlated to equity markets
Liquidity of portfolio allows for easier switching out of structurally challenged sectors
Relatively high look through gearing, which can exacerbate losses on the downside
Strong revenue reserves put the board in a good position to be able to maintain the dividend if they wish
Uncertainty around the continuing pandemic could keep pressure on areas of the property market
Continue to Portfolio
2024 Kepler Income & Growth Rated Fund

This trust has been awarded a rating by Kepler Trust Intelligence for income & growth... Find out more

Fund History

02 Jul 2024 Fund Analysis
TRY makes investing in real estate simple…
17 Jan 2024 Top of the Pops
We reveal the winners of our investment trust ratings for 2024…
10 Aug 2023 Fund Analysis
TRY: a unique way to capture a recovery in property valuations...
21 Jun 2023 Ça plane pour moi
Some of the world's biggest companies are doing just fine in Europe, yet investors shun the region. Time for a rethink...
11 Jan 2023 Solving the Rubik’s Cube
We reveal the winners of our investment trust ratings for 2023…
08 Dec 2022 Fund Analysis
TRY: global debt re-pricing creates opportunities in pan-European property markets...
07 Dec 2022 What’s that coming over the hill?
Is it a monster, or a debt refinancing anniversary? Our analysis of the property sector shows chunky discounts across the board are there for good reason…
27 Jul 2022 Fund Analysis
TRY’s index-linked revenues could be appealing in the current inflationary environment…
08 Jun 2022 Safe as warehouses
We look into the attractions of the often-overlooked commercial property sector…
05 Jan 2022 Kepler’s top-rated trusts for 2022
We unveil the winners of our ratings for 2022 in the Growth, Income & Growth and Alternative Income categories…
27 Oct 2021 Fund Analysis
TRY has a number of key advantages over a direct physical property trust…
21 Apr 2021 Fund Analysis
TRY offers a diversified and flexible way to invest in property, via listed equities…
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
22 Oct 2020 Fund Analysis
TRY offers a yield of almost 4% backed over 100% by reserves…
20 Nov 2019 Making the grade: Kepler's rated trusts report strong performance in 2019
Earlier this year, we launched our new ratings for income and growth. Since then, the 40 trusts to have been awarded the elite Kepler Trust Intelligence ratings have performed strongly…
18 Oct 2019 Fund Analysis
Specialist property trust, which has consistently outperformed its benchmark…
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Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.