The Norwich Property Trust (NPT) – the first authorised property unit trust to be launched in the UK – is celebrating its 15th anniversary.
The Norwich Property Trust (NPT) – the first authorised property unit trust to be launched in the UK – is celebrating its 15th anniversary.
The fund’s mix of direct commercial property and property shares has proved a winning formula over the years, and is popular with investors who want exposure to a broad range of retail, office and industrial property.
The Norwich Property Trust has:
- Hit Ł3bn for the first time in August 2006
- Received net cash inflow from investors of more than Ł1bn over the last 12 months to end of August
- Acquired 21 properties over the last 12 months with a combined value of Ł766m
The fund’s holdings
The fund’s asset mix at 31 August 2006:
- Direct property 70.4%, property related assets 14.2%, cash 15.4%.
- The direct property holdings consist of offices 42.0%, high street shops 14.0%, shopping centres 8.9%, retail warehouses 19.9%, industrial 13.9%, other 1.3%.
The fund made its largest-ever purchase in August 2006 – a prestigious City office overlooking the Thames let to a leading firm of solicitors. This property was bought “off-market” - a direct approach to the owner. This is an effective way to buy property when competition for acquisitions is so intense.
Major direct property holdings include:
- Princes House, Piccadilly, London (offices, retail and casino)
- 10 Queen Street Place, London EC4 (offices)
- Triangle shopping centre, Manchester
- The Watermark, Gateshead (offices)
- Trinity Gardens , Newcastle (office development)
Returns
The fund has delivered attractive returns to investors.
| 1 year % | 3 years% pa | 5 years % pa | 10 years %pa | |
| Fund return | 17.7 | 16.8 | 12.5 | 11.7 |
Source Lipper Hindsight, bid to bid, net income reinvested at dividend pay date. Performance to 31 August 2006.
Past performance is not a guide to the future.
UK commercial property has a major role to play in a diversified investment portfolio. Property remains an attractive asset class within a multi-asset class portfolio, where future returns are likely to reflect long-run historic trends with property delivering overall returns between equities and cash/bonds. Future returns from commercial property are likely to be lower than recent years.
Investors should remember: The value of property is generally a matter of a valuer’s opinion rather than fact. Investments in property can be illiquid and it may be difficult to encash at certain times.
The management team
The team running the fund is led by Gerardine Davies, who oversees the strategy of the direct property and the property shares in the fund. Cash management is run by the Morley Treasury team. She is supported by five chartered surveyors. Two focus on acquiring new properties; the others concentrate on maximising the value of the existing portfolio by, for example, refurbishing or extending a property, or renegotiating lease agreements.
Gerardine Davies, manager of the Norwich Property Trust, said: “This has been an exciting – period for those of us involved in running the Norwich Property Trust. As a result of the recent purchases we have brought the cash in the fund down to just over 15% at the end of August - its lowest level in some time - and there are more acquisitions to come with over Ł200m legally committed for early 2007 completion and around Ł200m in due diligence for 2006 completion. Despite the fact that we believe that property returns will be lower going forward, we remain optimistic/positive that the Trust will continue to provide reasonable returns to investors over the medium to long term.”
Neil Davies, director of marketing investments at Norwich Union, said: "We’re delighted with the performance of the fund and its managers, and the contributions they have made to customers’ investment portfolios. It is important to remember the contribution property can make to an investment portfolio through diversification and its low correlation with cash, bonds and equities.”
Past performance is not a guide to the future.
-ends-
Press office contacts:
David Gwyer 01904 452828 Out of hours 07800 699508
Louise Soulsby 01904 452617 Out of hours 07800 699526
About Norwich Union
- Norwich Union is the UK’s largest insurer. It is a leading provider of life, pensions and investment products and one of the largest Financial Adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.
- Norwich Union is the UK’s largest general insurer with a market share of around 14%, with a focus on insurance for individuals and small businesses.
- Norwich Union’s news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media