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Real Estate Investment Trusts An assessment of the opportunities for corporate and private investors

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Halliwells and Wingrave Yeats Seminar. London. 1st June 2006. 2. Objective of this Case Study ... The differences to investing in a REIT to the current quoted ... – PowerPoint PPT presentation

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Title: Real Estate Investment Trusts An assessment of the opportunities for corporate and private investors


1
Real Estate Investment TrustsAn assessment of
the opportunities for corporate and private
investors
Michael Walton Chief Executive Rynda Property
Investors
Halliwells and Wingrave Yeats Seminar London
1st June 2006
2
Objective of this Case Study
  • To explain-
  • The investment performance characteristics we can
    expect from a UK REIT
  • The differences to investing in a REIT to the
    current quoted property sector and
  • to highlight the opportunities for investors

3
The main reason for the growth in the US REIT
market is yield
Dividend yields - REIT versus SP 500
Source NAREIT
4
Performance analysis
5
REITS are not a good proxy for Real Estate
  • Historical analysis shows investing in REITS
    rather than Direct Real Estate loses
    substantially all of the traditional benefits of
    Direct Real Estate..
  • being a good hedge against inflation
  • being a good diversifier to a bond portfolio
  • being a good diversifier to an equities portfolio

6
Additionally REITS could restrict the traditional
entrepreneurship of the property sector
  • Management of REITS
  • Alignment of Interest

7
The main differences to investing in REITS
compared to the current quoted property sector
8
Sectors focus versus diversified portfolio
9
REIT v Current Quoted Sector
  • Change in
  • responsibility for sector allocation from
    directors of REIT to individual investors
  • City sentiment from Net Asset Value to Dividend
  • key personnel who move to Private Equity Real
    Estate arena

10
The Opportunities
  • Greater liquidity
  • Predictable revenue stream
  • Earnings transparency
  • Long term capital appreciation
  • Some diversification benefits
  • Funds of REITS

11
Conclusion
  • The problem for investors is that there is
    unlikely to be any meaningful non REIT quoted
    sector left in 2 years so therefore the choice
    will be REITS or Private Equity Real Estate Funds

12
Rynda contact details
Michael Walton Chief Executive Tel  44 (0) 20
7866 6276 Mobile  44 (0) 7771 915565 e-mail
michael.walton_at_ryndaproperty.com Web www.ryndapr
operty.com Rynda Property Investors LLP is
authorised and regulated by the Financial
Services Authority.
13
Important Information
  • This presentation is intended to provide
    information about investments and investment
    services to professional investors who are
    familiar with and capable of evaluating the
    merits and risks associated with investments of
    the kind described. Investors must also be
    Intermediate Customers or Market
    Counterparties as defined under the rules of the
    UK regulator, the Financial Services Authority.
    The products and services to which this
    presentation relates are only available to such
    persons and any other persons should not act on
    it or rely on it.
  • Any investments referred to may not be
    registered with any regulator, regulatory body or
    similar organisation or institution in any
    jurisdiction. Potential investors should verify
    whether products are listed on any stock
    exchange. Before making an investment, you should
    consider taking independent professional advice
    about the unregistered and potentially unlisted
    status of any product.
  • This presentation is not to be construed as an
    offer, invitation or solicitation of any
    investment product in any jurisdiction, and is
    not being and will not be made available to the
    public. Any future investment will be subject to
    and made on the terms of the legal agreements
    relating thereto.
  • The information contained is based upon a number
    of sources and believed to be correct, but cannot
    be guaranteed. Any opinion and estimates are
    judgments as of this date and are subject to
    change without notice. Indications of the
    potential return on the investment have been
    given in good faith but are not guaranteed and
    are subject to uncertainties beyond control and
    should not be relied upon by investors in forming
    investment decisions.
  • No representation is made regarding the legal,
    accounting, regulatory or tax treatment of an
    investment in any jurisdiction relevant to a
    recipient of this document.
  • This presentation contains proprietary
    information and, subject to applicable law, is
    confidential to its recipients professional
    advisors.
  • Past performance is no guarantee of future
    results.
  • Please note that investing in alternative
    investments such as real estate is not suitable
    to all investors. Alternative investments are
    intended for high net worth, sophisticated
    investors who can bear the economic risks
    involved. Risk factors should be fully reviewed
    prior to the decision to invest. Any information
    given or representation or statement made by any
    dealer, placement agent, salesman or other person
    and not contained herein should be regarded as
    unauthorised and, accordingly, should not be
    relied upon.
  • The target return is not a prediction,
    projection or guarantee of future performance. It
    is based upon assumptions regarding future events
    and conditions which may not prove to be
    accurate accordingly the target return should
    not form the primary basis for an investment
    decision. There can be no assurance that the
    target return will be achieved, and a loss of all
    or part of the investment may occur.
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