It might seem odd to launch a new REIT fund in the midst of a global pandemic, especially one that has hastened the shift to online retail and raised questions over the future of the office (you can read our views on these issues here and here).
Having long specialised in meeting the needs of investors seeking higher, stable income at lower relative risk, our long-held “property for income” philosophy is the driver behind us launching a new Global REIT Income Fund. This is a natural extension of our domestic and Asian REIT investment capabilities developed over 23 years.
Whilst the timing of the launch might be seen as challenging, it’s also full of opportunity. We believe the current market conditions suit our active, income-focused approach and present an attractive entry point for long term investors.
When it comes to commercial property, the COVID-19 pandemic has highlighted compelling reasons to invest into select global real estate markets and sectors likely to benefit from accelerating structural trends.
For investors in search of a relatively high income without excessive risk at a time of record-low interest rates, we believe there’s no better time to launch the fund, for the four following reasons.
1. Relatively high, defensive income
The APN Global REIT Income Fund presents a unique offering in the market by focussing on recurring rental income generated from high quality real estate assets across a diverse range of property sectors.
With interest rates at record lows, what commercial property investors call “the spread” – the difference between the long-term bond yield and the yield on commercial property – has rarely been higher. Compared with other investment alternatives, whilst acknowledging that different strategies bear different risk profiles, global REITs are attractive on a yield and valuation basis: