Fund to watch: Henderson UK Property

Henderson UK Property is one of the most established property portfolios in the sector. It owns a variety of prominent buildings across the country, including Hayes Bridge Retail Park in west London, Manchester’s Zenith Building and the BMI Harbour Hospital in Poole.

Unsurprisingly, given its focus on higher quality, well-located sites, it has an impressive list of blue-chip tenants, including B&Q, Centrica, Compass Group, Standard Life, Nissan Holdings (UK), Tesco and John Lewis.

The stated aim of the £789 million fund is to achieve a high income, together with some growth of both income and capital, through investment primarily in commercial property and property related assets.

Other investments may include money market instruments and derivatives. It currently has 36.9% of its assets invested in offices, 21.3% in retail outlets, and 16.9% within industrial sites, according to the latest fund fact sheet.

In addition there is 2.5% in property securities, 6.8% in other holdings, and 15.6% in cash.

Small, positive gains

Patrick Connolly, spokesperson at AWD Chase de Vere, expects the muted returns of recent years to continue for the foreseeable future with bricks and mortar property funds producing small positive gains - which are more likely to come from rental income rather than capital appreciation.

"In the current environment, capital protection is more important than trying to maximise gains and so we prefer to use funds that are defensively positioned in quality properties with strong tenants, such as Henderson UK Property and M&G Property," he says.

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