Investec Wealth and Investment has turned its attention away from conventional property investment and towards GP surgeries, theme parks, hospitals, care homes and student accommodation.
The wealth management and investment services division of Investec said on Tuesday morning that it had redeployed around 20 per cent of its real estate exposure – equating to £200m – from conventional property investments to non-traditional property vehicles.
IW&I said the sub-sectors it has diverted to have become more attractive for “income-seeking retail investors because they are exposed to less economically sensitive areas of real estate”.
In the GP surgeries sub-sector, IW&I has invested in Assura, Primary Health Properties and Medicx; in student accommodation, Empiric and GCP; in care homes, Target Healthcare; and in hospitals and theme parks, in Secure Income REIT, which has a portfolio including 19 private hospitals and six leisure assets which include visitor attractions such as Thorpe Park and Warwick Castle.
Earlier this month, with investors taking flight from the area after the Brexit vote, trading on a number of real estate funds was suspended.
“Property as an asset class is primarily a source of rental income and, post Brexit, projections of a cut to UK base rates will offer support,” said Chris Hills, chief investment officer at IW&I.
“However, fears of a slowdown in the UK economy have meant that many traditional real estate investments have been hit by rising risk aversion.
“Many investors are looking for a healthy level of income without taking on too much economic risk in terms of voids or tenant defaults, and these non-standard property plays are ideally suited to this objective.”
IW&I has around 1,100 staff working across 15 offices in the UK and £27.5bn of client funds under management (FUM).