The manager has been adding to positions in Great Portland Estates, British Land and Max Property. The increased allocation to the UK comes as technology, media and telecommunications (TMT) firms show increased interest in renting London property.
“Pockets of the London market are now seeing a supply-pinch, with limited supply against rising demand driven principally by international TMT tenants expanding in central London,” Ross said.
“As a result, with rents growing in each of the office, retail and residential sectors in central London, the stronger and more active management teams from the real estate equity market are using their competitive advantage to deliver significant returns from re-developing real estate in niche locations where there is evidently significant structural tenant and investment demand.”
Ross currently has 2.9% of his £40.7m portfolio in West End specialist re-developer Great Portland Estates. He added to the position in recognition of the firm’s strategy of re-developing undermanaged properties into the bespoke offices that TMT businesses are looking for.
The Premier Pan European Property Fund’s position in real estate small cap asset management specialist Max Property has been increased from 0.6% in September to 1.6% today.
Ross sees the company as having significant turnaround potential. Max Property is trading at a significant discount to net asset value, despite its exposure to the London TMT market and its highly cash flow generative peripheral assets.
Meanwhile, the fund’s allocation to British Land has been lifted from 6.3% to 8.1%, making it the portfolio’s second largest holding, in light of the company’s London developments and growing income stream.
The additions to these businesses means the Premier Pan European Property Fund’s weighting to the UK has increased from 45% to 49% over the past three months, keeping it the portfolio’s biggest regional allocation.
According to FE Analytics, the fund has returned 26.76% over one year and outperformed the IMA Property average of 13.58%. It also outperformed over three years but underperformed over five.
