Thursday, 31 May 2018

TR Property - Final Results

I hold this property trust in my ISA and in the past year it has also been added it to my Sipp drawdown portfolio.

The fund is managed by Thames River and aims to maximise the total return by investing in international property shares and direct property mostly in the south east of UK. Manager, Marcus Phayre-Mudge has been involved in property investment since 1992 and has been involved in running the Investment Trust since 2004.

At the end of April the largest geographic exposure was the 43% weighting in the UK, with France making up a further 17%, Sweden 10% and Germany 25%. Retail and office space accounted for 26% and 32% respectively, with another 32% in residential and the remainder divided between industrials and diversified. The main investment areas are shopping centres, residential property in Germany and offices in London’s West End.


The trust has today published results for the full year to end March 2018 (link via Investegate). Net assets total return have increased by 15.5% (previous year 8.0%) and share price by 25.5% due to a narrowing of the discount.

Commenting on the results, chairman Hugh Seaborn said:

"It has been a very good year for the Trust. Performance has been strong in both absolute and relative terms and we have enjoyed healthy revenue growth.

In November I noted that we remained positive about the merits of property as an income generating asset class and that we were focused on high quality businesses with strong recurring cashflows. Six months on, that statement remains valid but subject to heightened vigilance. The level of divergence between those businesses with growth prospects and those without continues to widen and the advantage of being able to consistently reduce the cost of debt is coming to an end.

Real estate continues to provide an income advantage particularly when compared to prevailing bond yields. Our manager is focusing on businesses in areas and sectors which provide the prospect of rental growth, combined with sustainable debt levels. Therefore, with the caveats referred to above, we remain confident of the attributes of the asset class".
3 Yr Performance TRY v HICL
(click to enlarge)


Revenues have increased by 16% and as a result the final dividend will be increased to 7.55p (last year 6.4p) making a total of 12.2p for the year, an increase of 16% compared to the previous year 10.5p. This gives a yield of 3.0% at the current price of 411p.

In contrast to the fortunes of HICL which was added around the same time, this trust has so far been a very positive addition to my portfolio - the share price is up 40% on my purchase price at the end of 2016, plus the dividend has increased by 46%. 

Obviously I am delighted with my returns over the past 18 months since purchase. I do not however expect this performance to continue at the same pace and the next year or two will be mainly dominated by the Brexit negotiations so I expect a little volatility in the share price but the income seems fairly secure and I am happy to continue and will be looking to add to my holdings on any significant pull-back in the price.

As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation - always DYOR!

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