Assisted by its tendency to grow ahead of inflation over longer time periods, property stands up well to scrutiny when compared with the other major asset classes such as equities and bonds – in a number of global markets property has outperformed both of these asset classes over the longer term. The chart below shows how UK property has outperformed over the past 30 years.
Property as a Source of Income
It is Harvest’s view that property should be viewed primarily as a source of income and secondarily as a means of capital growth. Investing in property vehicles which can deliver reliable sources of income at attractive levels of return will lead naturally to the quality end of the property spectrum. In addition, because rents tend to move with inflation over the longer term, the levels of income redistributed to investors will also tend to grow over time. Of course, a growing level of rental income will in turn lead to capital growth.
Harvest Liquid Property Strategy
The Harvest Liquid Property Strategy involves taking an equal position across the three recommended funds. By doing so, the investors achieve exposure to total assets in the region of €1 billion as well as gaining a combination of Irish, European and Global real estate exposure.
The average distribution yield from these funds is expected to be c.4% initially but should grow over time. In addition, while property as an asset class is notoriously cyclical, we would anticipate steady capital growth from these funds over the coming years.
To find out more about the Harvest Liquid Property Strategy and to determine if it is suitable and appropriate for your portfolio please speak to your Client Advisor, call us on 01 237 5500 or email justask@harvestfinancial.ie.