We believe in investing in high yielding commercial investment property. When property values fall, yields increase and we consider buying. When property values rise, yields reduce and we consider selling.

1. When buying for income, sustainability of income is a priority.

2. Property is illiquid:

  • This illiquidity can be mitigated by rental income – liquidity through income.
  • Over the long term it is income and not capital value movements which largely determine total investment property returns (IPD: income contributed 95% of total returns over the 10 years to 31-Dec-2015 and 67% over the 35 years to 31-Dec-2015).

3. Capital preservation:

  • Capital is better protected if investments yield a high income. Income dampens capital value volatility.

4. A fundamental approach to investing:

  • Consensus may chase a particular investment theme but that does not justify it.

5. Flexibility in the light of market changes:

  • Largely exited the UK commercial property market in 2005, re-entered in 2009. We act dynamically.
  • Reversed asset management policy of waiting until lease expiry to renew leases following onset of the credit crunch in 2008.
  • Recommenced development activity in the UK in May 2013 in response to government legislation relaxing the planning regime, coupled with market buoyancy.

6. An active approach to asset management (where possible):

  • Drive income and in turn capital values by hands-on property management, relying as much as is possible on internal resources.

7. Think from first principles