Property funds are similar in principal to other collective investment funds where people pool their funds together to buy all kinds of assets from offices, shops, factories, and so on. Some of these funds may decide to invest by directly purchasing assets and managing them or buying shares of already running assets. The funds are divided into units which members buy. Each unit represents a share. Funds from the sale of these units are reinvested into the property fund. Basically, they are great ways to diversify one’s risks and own parts of a property one is interested in and can’t purchase because of insufficient funds. So if you are looking to invest in a property fund in the UK, here are some of the largest property funds.
1 L&G UK Property Fund
L&G UK Property Funds is one of the largest property funds in the UK with a £3bn total worth. They have consistently ranked with a few other funds as the biggest in property investment. But while other property investment funds focus on just London and the south-eastern parts of the UK, L&G UK Property Fund spreads out its investment focus over a wider geographical area.
It is one of the few property funds that did not fold after the effects of the European Union referendum which is not surprising since it has always stayed at the top and has received reversal awards for it over the years. Chris, a property investment professional at Crowdlords has one theory for L&G’s success. He says “investing in UK property funds comes with a lot of risks, so L&G’s cautious approach to investment helps it adapt to changes within and outside the sector”. Legal and General Property keeps about a quarter of its assets in liquid cash at all times so that people investing in UK property funds feel a certain level of peace of mind.
2 First State Global Property Security
The fund’s objective is to provide the income to grow investors’ investments. They do not invest directly in businesses by acquiring assest, rather, they buy shares in already running ones. This is because it believes that indirect property investment is cost-effective since it saves time and the cost that is involved in researching and purchasing real estates.
It was launched in 2006 and is currently worth over £275million. One of its major investment is Hammers on which is involved in student accommodation.
3 The Industrial Property Investment Fund
This property fund invests mostly in multi-let industrial estates in the UK. Since its launch in 1997, its drive has always been good quality and high yielding physical properties and the determination to always outperform benchmark.
Last year, according to the AREF/IPD UK Quarterly Property Fund Index, the Industrial Property Investment Fund was the best performing property investment fund in the UK, delivering a return of 25.4% even though it only focuses on industrial assets in the south east.
Investment in property comes with risks as well as the possibility of rewards.
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