Investment capabilties

Property

Why property?

The property sector currently benefits from a highly favourable background, with the interest rate cycle, the credit cycle and the economic cycle all in a highly supportive phase. In addition, the supply cycle is positive given the relatively low levels of new space coming on to the market. Moreover, the dearth of income opportunities in other asset classes is driving investor flows into the sector, a development which is also proving highly supportive. However, it is important to remember that due to high transaction costs, property is a long-term investment and that income, rather than capital appreciation, is the key driver of total returns.

Why Columbia Threadneedle Investments for property?

Our property team is one of the most experienced in the UK with 24 investment professionals. They have on average 16 years of market experience and have been with Columbia Threadneedle Investments for an average of 10 years. This stability has been a key factor in the team’s success. Threadneedle manages property assets of US$10.9bn (£7.6bn, Eur 9.8bn) as at 31 December 2014.

The team uses an active, hands-on approach that emphasises stock selection as the main driver of long-term outperformance. We are flexible buyers and focus on high yielding investments when building our property portfolios, rather than “trophy assets”, which frequently offer lower yields. We also avoid speculative developments due to the inherent risks of locking-up capital for long periods.

We actively manage our holdings, working hard to maximise returns by refurbishing and updating buildings to increase capital value and improve rental growth potential.
In 2010 we teamed up with Stanhope, one of the UK’s leading commercial real estate developers and the Carbon Trust, a not-for-profit company with the mission to accelerate the move to a low carbon economy. This innovative partnership is designed to capitalise on growing investor demand for attractive, socially-responsible investment opportunities, as well as the growing demand from occupiers for workplaces that deliver efficiency in terms of lower carbon outputs and reduced occupancy costs.

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