Standard Life Investments Property Income Trust Converts to a REIT
29 January 2015
Standard Life Investments, the global asset manager, has converted its award winning Property Income Trust (SLIPIT) to a REIT (Real Estate Investment Trust) to ensure greater accessibility and tax efficiency for investors.
REITs are ideal for wholesale investors who want to buy into the commercial property sector, using the real estate expertise and team ethos within a reputable fund management house.
SLIPIT was launched as a Guernsey-based investment company in December 2003, to provide investors with an attractive level of income with the prospect for income and capital growth by investing in a diversified portfolio of UK commercial real estate. Standard Life Investments has managed the trust since inception and Jason Baggaley has been the manager since 2006.
SLIPIT has provided a return to investors of 29% over one year and 45.8% over three years. It has a market cap of £191m (at 31 Dec 2014), and an investment portfolio of direct assets valued at £269.9 million. The Company pays a quarterly dividend, which at the end December 2014 represented an annualised yield of 5.9%.
Gordon Humphries, Head of Investment Companies, Standard Life Investments said:
"SLIPIT has been a very successful investment vehicle for the past ten years and we fully expect it to continue to deliver robust returns for investors. We see a growing trend for Guernsey property investment companies to convert to REITs as they offer investors a more established, accessible and liquid form of investment, with greater tax efficiency going forward.
"Our priority is always to existing shareholders, protecting their value and ensuring there is no dilution. Jason Baggaley will continue to take an active approach to managing the property portfolio in the Company to maximise returns and currently has a fully invested portfolio of office, industrial and retail assets that we believe provide the prospect for attractive returns as rents and capital value increase at this point in the real estate cycle."
In 2014 SLIPIT won two awards: the Property category at the 'Investment Company of the Year' awards, hosted by Investment Week in London and the Investment Adviser 100 Club Awards. In 2014 SLIPIT's equity base doubled through share issuance and strong investment performance.
Also in 2014 (November) SLIPIT purchased a portfolio of five industrial and logistics units for £23.75 million, reflecting an initial yield of 7.25%. The purchase was funded from equity raised earlier that month. The five assets in Manchester, Birmingham, Cheltenham and Milton Keynes total 390,490sqft. The units are all single-let and have scope for further asset management.