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 Investment Trust (TRY) owns a large and liquid, £1.2bn portfolio made up mainly of the shares of property companies based around Europe, including the UK. It also holds up to 15% in UK physical property (currently 7% of NAV).

TRY has consistently outperformed its FTSE EPRA/NAREIT Developed Europe benchmark in recent years, as discussed in the Performance section. It has also outperformed the direct property trusts in the AIC UK Commercial Property sector, which are arguably the first port of call for UK investors seeking property exposure.

TRY is managed by Marcus Phayre-Mudge, who took over the portfolio in 2011 but has been involved in the management of it since 1997. Marcus manages a team of ten, overseeing £2.3bn of primarily pan-European real estate equities – of which TRY is the largest fund. He uses both top-down analysis of countries and sectors, and bottom-up analysis of valuations to guide his decisions. This approach has led to a portfolio biased towards industrial, logistics and residential and away from retail. TRY seems to be overweight in the UK, but the exposure to the UK economy is low (see Portfolio section).

TRY pays dividends semi-annually and has not cut its payout following the impact of the pandemic, unlike many property trusts and funds. It has cash in reserve equal to last year’s full dividend, and yields 3.8% on a historic basis.

Following the impact of the pandemic the discount has widened out to 10%, having traded on a slight premium at the turn of the year. We note, however, that the companies TRY buys are also trading on discounts to NAV.

Analyst's View

TRY offers a way to get diversified property exposure, while sidestepping some of the major issues in the UK property market. TRY exploits the advantages of the investment trust structure by using gearing to enhance returns, investing in less liquid investments when appropriate and has established healthy revenue reserves. Meanwhile the more diversified exposure across Europe minimizes Brexit risk and the importance of any one economy to returns. Additionally investing in shares means much greater liquidity and the ability to react faster to events, such as the development of the current pandemic.

Perhaps crucially for many investors, the healthy dividend does not seem under threat either. The historic yield is 3.8%, compared to 4.6% for the median generalist UK commercial property trust. Historically this gap has been wider, but the key point is the relative security of the payout. As we discuss in the Dividend section, the low exposure to troubled sectors and the portfolio’s diversity means that income collection this year seems to be proceeding well. With more than 100% of last year’s dividend in revenue reserves, the board will be able to maintain the payout at last year’s level or even raise it if it wishes.

We also think it notable that, although the discount is only 10%, the shares of the underlying investments are trading on a discount to NAV too. Marcus estimates the look through double discount is as high as 13%.

bull bear
A strong track record of outperformance Invests mainly in shares not physical property, so tends to be correlated to equity markets
A double discount, thanks to discounts on the underlying companies Relatively high look through gearing, which can exacerbate losses on the downside
A yield close to that of direct UK property trusts but with reserves over 100% of last year's payout 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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