Property for pensions comes of age through REITs, says fund manager

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The Treasury will drive a hard bargain with providers who are planning to develop onshore real estate investment trusts (REITs), says Chris Turner, Henderson TR Property investment trust manager.

But proposed new rules should allow property investment to become a particularly attractive long-term solution to the nation’s savings gap, suggest the fund manager. The chief benefit of REITs for those planning for retirement compared to, say, a buy-to-let flat, is they offer stable high income of about 5% to 7% annually with little exposure to risk associated with high levels of gearing or development of new property. In fact, the risk/reward structure is such that investors could look at REITs as an alternative to bonds, Turner says. Evidence from other countries so far suggests...

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