In this video update, Ainslie McLennan, Co-Manager of the Janus Henderson UK Property PAIF, discusses opportunities and risks within UK commercial property in 2020 and examines key themes that are relevant to the fund’s strategy.

     Key takeaways

  • High quality UK commercial property in good locations with robust tenants should continue to provide an attractive and regular income stream
  • Asset management initiatives afford opportunities to enhance returns and mitigate risk, notably within the retail sector
  • The fund’s small allocation to regional high street retail assets* continues to be reduced; the focus instead is on areas that the investment team believe are best suited to the market conditions ahead such as well-located supermarkets and logistical facilities
  • The alternatives sector continues to offer additional diversification within a balanced portfolio of UK commercial property assets

       *High street assets outside of London and the South East of England

 

Discrete year performance

Dec 2018 to Dec 2019 Dec 2017 to Dec 2018 Dec 2016 to Dec 2017 Dec 2015  to Dec 2016 Dec 2014 to Dec 2015
Janus Henderson UK Property PAIF A Acc 2.1% 3.4% 8.0% -4.9% 8.1%
Janus Henderson UK Property PAIF I Acc 2.8% 4.1% 8.7% -4.3% 8.8%
Janus Henderson UK Property PAIF Feeder Fund A Acc 2.1% 3.4% 8.0% -4.9% 8.1%
Janus Henderson UK Property PAIF Feeder Fund I Acc 2.8% 4.1% 8.7% -4.3% 8.8%
IA UK Direct Property Sector peer group average -0.8% 2.9% 7.6% -2.0% 7.3%

 

Source: Morningstar as at 31 December 2019. PAIF & Feeder Fund returns, accumulation share class, bid to bid pricing basis, net of fees, in sterling terms. Performance data may change due to final dividend information being received after quarter end.

Peer group comparator:  IA UK Direct Property. The Investment Association (IA) groups funds with similar geographic and/or investment remit into sectors. The fund's ranking within the sector (as calculated by a number of data providers) can be a useful performance comparison against other funds with similar aims.

Past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

Glossary

Alternatives sector – includes assets such as cinemas, gyms, hotels, food outlets, restaurants and care homes.

Asset management – can include refurbishment work to improve valuations and attract a better quality of tenant, changing the planning use of assets to increase rental revenue, or renegotiating existing leases to extend tenancies.

Commercial property – any property asset used for commercial purposes. The asset class is broken down into three main sectors: retail, office and industrial. There is also the growing alternatives sector.

Core assets – the managers define core assets as being top class in at least three of the following five criteria: location, quality of tenant, lease duration, lease structure, and building specification.

Yield – a measure of the percentage of income return you receive from a property investment. This is calculated as the gross annual rent generated by a property, divided by its current valuation.