These differences are a function of the high average capital value (“lot size”) of Central London offices and shopping centres, which are effectively off limits to many small pension funds who, in order to diversify risk, cannot afford to have one property accounting for 20% plus of their total capital value.The net asset value of PUTs was £7.3 billion at the end of 2001, according to figures published by HSBC and The Association of Property Units Trusts.


Real estate Conveyancing solutions Hamilton confirms that it is a recognized feature of shopping centre’s that the rent which tenants can afford to pay also varies depending upon the retail category. Figures for property limited partnerships are more difficult to obtain, partly because there is no comprehensive register and partly because of uncertainties about how the shares in partnerships should be valued.

If it is assumed that the average level of gearing in limited partnerships was 40% and that shares were valued at net asset value, than the total value of institutional interests in property limited partnerships was approximately £4.3 billion at the end of 2001. Unfortunately, there are no definitive data on the proportion of quoted company shares which were held by UK pension funds and long-term insurance funds as opposed to other investors.

Applying this share to the market capitalisation of property companies at the end of 2001 results in an estimated investment in property companies of £9 billion. If allowance is made for those assets held in long-term insurance funds which are held for life insurance and savings policies, around 45% of total value, then it is possible to estimate that UK pensions had £84 billion invested in property at the end of 2001.

It is particularly reassuring that our technical and support teams coped comfortably with these high volumes, and that we can maintain the quality of service our clients expect. The nature of the unitised vehicles in each of these markets are slightly different, but all share most or all the same set of generic characteristics. Evidence on rates of investment return being earned by existing as well as by new landlords in the private rented housing sector is still very patchy. The main purpose of this report is to examine evidence on current rates of return in the private rented housing sector.