UK property equities

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EG Capital UK commentary

The Macquarie UK REIT share price index rallied in the first half of November to a high for the year of 44.4 on the 17th. But it has drifted down again since then, not helped by what Nomura property analysts called ‘the Dubai effect’ late last month.

All UK property shares returned -1.75% in November, down -4.6% relative to the FTSE. In the first two weeks of December, all property shares and REITs fell back to the bottom of the 10% trading range in which they have been stuck since August.

Over 12 months to the end of November, all property company shares are up 23% (but REITs are only up 8.6%) due to bounces in March and summer (see chart).

Segro became the first UK property company this year to successfully tap capital markets, raising £300m at 6.75%. Hansteen paid £16.8m for 12% of Kenmore European Industrial Fund, while UNITE is close to raising £150m for its Student Accommodation Fund. Investor Nathan Kirsh extended his 50p cash offer for Minerva to 23 December, as the developer published a defensive 95p-a-share valuation.

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