UK real estate investment trusts (REITs) are expected to deliver better returns for investors as the sector continues to consolidate, according to TIME Investments.
In 2019, 83 REITs or similar property securities were listed on the London Stock Exchange, but this number has since fallen towards 40. Whilst some have been privatised and taken out of the listed arena, many have been acquired by fellow REITs.
While this may mean fewer REITs to choose from, TIME believes that many that have left the sector didn’t offer a unique investment or growth opportunity and similar investment strategies continue to be provided by the remaining REITs.
It also argues that consolidation should mean more efficient use of capital as REITs tend to be proportionally more expensive to run when smaller, with fixed general administration costs and high debt margins covered by less rent.
Andrew Gill, co-fund manager of the TIME: Property Long Income & Growth Fund, points to LondonMetric, a REIT focussed on low-cost to run assets with a logistics theme, which has moved from a FTSE 250 company in 2018 to a FTSE 100 company in 2025 primarily through acquiring other REITs.
Gill said: “Whilst further consolidation means there will be fewer UK REITs to choose from, in our view, the sector now offers higher quality and as a consequence, a much greater chance of higher long-term growth.
“This could ultimately lead to more attractive returns for investors such as TIME and more cash in the pocket of investors through faster dividend growth.”
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