The role of UK property in client portfolios
- 34 mins 31 secs
The role of UK property in client portfolios
- Guy Glover, Manager, BMO UK Property Fund, BMO Global Asset Management
- Matthew Howard, Director, Property Funds, BMO Global Asset Management
- The characteristics of UK property as a portfolio diversifier
- The pros and cons of open ended and closed ended real estate funds
- How fund managers look to ensure liquidity in their portfolios
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with so many investors looking to diversify their portfolios, what can an allocation to UK real estate do to help? Well, that's one of the topics we're gonna be looking at in this academia session with the help of Guy Glover, manager of the B m o u K Probably fund on Matthew Howard, director Property funds Be about real estate partners. Well, let's start by looking at the learning outcomes for this academia. You first, of all, the characteristics of UK property as a portfolio diversify. Secondly, the pros and cons of open ended and closed ended real estate funds and finally, how fund managers look to ensure liquidity in their port failures. Well, when the pair came into the studio, I began by asking Matthew Howard about the characteristics of UK property and the role it plays in an overall portfolio. We're about to kick off. What would you say? The role of UK property is in an overall client portfolio? Well, I think property is a diversified. Those two key elements to commercial properties, the income return and the capital return on the income return is fundamental to property. If you go back to 2001 property returns. The income element has been about 76% over that period on in the short term, 5 to 10 years it's bean at least over half. So the underlying returns from property is that strong in comm element with the prospects of capital growth. So it's kind of a hybrid as it class somewhere between exes and bombs. I think it's quite important to realize that where forecast are over the next say, 35 years. Most of the returns are now gonna be coming from the income component on that. That's a nice addition to investors. Portfolio. How much correlation does it have to equities and bombs? If it's a hybrid, does it really make much difference to enable the court? The correlation isn't particularly strong. You know, I think the correlation taxis over the last 2030 years about 20300.4. The correlation to guilt is actually slightly negative, so it's not highly correlated. But that means that property is a good diversify in a balanced portfolio. And how does it respond to stock market in economic cycles in general, when a When a good period of property, when a desk, a period Well, I think probably it doesn't necessarily respond particularly to the stock market. You know, the two fundamentals are separate. Property is a very nuanced space on the returns were property is based on the specific asset, the underlying fundamentals of the asset, and that could be quite different from the stock market. The property stock might be highly leveraged. It might focus on a specific sector, region or even other higher development exposure. So, really, the two aren't particularly correlated, I suppose nothing that investors will think about is, you know, they might hear about property thing. That sounds interesting. What percentage of their overall portfolio should be in property? Well as an alternative asset property is usually about 5 10 maybe up to 15% off a portfolio. Asset Allocators would look to put that kind of waiting in a balance port photo, and it really depends about depends on investments, appetite for risk and what their return requirements. What we are saying, Maur recently is people looking at property is a corporate bond proxy, has long term income secure contractual income, but also has out for high yield at 5% plus in the monthly index. Compared to corporate bonds, which are +22 and 1/2 percent. So we're seeing some asset allocation increasing the property exposure because, of course, it offers a corporate bond like return. But the yields have been squeezed. Sze due to Q B. And if you're looking property, that's probably cos out there you can invest in. Or there's the buildings themselves, the bricks and mortar. Can you talk us through what the attributes of of each of those two are? Yeah, I think, with the property cos it's about the diversification. So with the regime in the UK, investors have quite a broad church off sectors to be able to invest in without specific sectors like healthcare or PRS, or balanced commercially conservative poor photos. So that gives investors some diversification and the ability to trade shares on a fairly liquid product. If you're investing directly into real estate, obviously specific risk on a specific asset unless you are high net worth individual, you're not necessarily gonna have the bank balance to be able to invest directly and commercial properties. So the trust give a degree of diversification. So I'm just going to say that Theo open Ended Funds Universe enables you to get bricks and mortar exposure. Same level of diversification across the various sectors. But also pricing isn't linked to the stock market. It's very much more linked to the underlying asset being valued on the n a. Be off the funds at any one time with unit's being sold it at a Navy, which is an important aspect on, um, a sort of halfway house between owning properties directly on dhe owning REITs. But if you won't read or a property Sherman in terms of its performance characteristics, does it act more like the underlying bricks and mortar buildings? Or does it tend to act much more as a proxy on the stock market? I think it's fair to say ACSM or as a proxy to the underlying bricks and mortar, you know, certainly over over the long term basis. I mean at the moment, for example, property stocks, if they have high waiting's to retail or any waiting to retell their discounts for anybody to reflect the downward trend in retail values, which I think is is fair, maybe that's over. State is in the short term, but it's a comment on the underlying bricks and mortar and Ultimately, it's the underlying brooks and more bricks and mortar from a balanced portfolio, which drives the performance off that vehicle. So we are seeing some shopping center reads out, being being trading a very big discount, their underlying n a V very much forecasting further falls in that market on. So it is forecasting what's going to be happening rather than their current. And it may be their current anything. So when you look out across the range of property, equities is that there's a real variety in risk and reward and a mandate that's out yet from the specialist rates, which may be long term, pseudo government backed income away Thio a diversified rate. But specialist ones like industrial REITs, which could add something else. But ive always gotta understand what's happening to the underlying assets behind that, where the growths coming from on when that growth cycle made term. And for investors in the UK that I guess there's two vehicles that you could be, and as the open ended vehicle, which I know you you run. And then there's a closed end of vehicle read. But I know you're you helped to run as well, so Let's just go to the open ended one first. What are the pros and cons of the open ended approach? OK, the we would say that they open ended approach very much provides you with a true level of the investigation being linked to the actual under lying asset class rather than being linked maybe more to the stock market. But it's actually worth while taking a step back because it be more global asset management. We offer a complete set of exposure from separated mandates. Open ended funds. Thio Reet pulls her hybrid vehicles probably growth on income on also listed global real estate vehicles. So what we way say to our investors is a What are you trying to achieve with your exposure thio UK commercial property on. That's not very much the starting point because each of them has the pros and cons going back to open ended vehicle. Obviously, we provide great level of diversification. We price steady income return, but there is a liquidity aspect where we hold a certain chunk of the vehicle in cash fight that daily liquid see which the platforms required. So if I'm investing in an open ended property fund it sounds like what I'm actually investing in is a bit of property and some cash. What cash buffet do you would you run? Okay, Typical. You cash buffers around 15% a day moment. It's slightly elevated because of some political rests out where, but they wax and wane on DDE. A sensible level is is around 15% slightly above a long term target of 10 to 12%. It does drag down the income return at the current time, but it's important defied the sensible level of liquidity. Importantly, the investors appreciate that investors appreciate that cash is there. Divide that secrecy. They are getting exposure to the commercial property market from the majority off their holdings. And sometimes their manager may technically increase their cash holdings to reflect what's happening in the market. They may see opportunities coming through in 69 12 months. Time on DDE. In terms of the price one pays for all of this is invested. Does that mean it's considered good practice in the industry to charge, you know, an active management fee only on that 85% that's in property and the cash is something else, or do you judge across the peace. What's what's typical? Okay, Typically, you will charge a fee across the whole fund. However, two years ago, the Beamer UK Property fund they didn't streets a rebate for a certain element of the cash holdings above the structural level s O. That the investors weren't being penalized really shows the cooperative approach we have with long term holders of fund and ensuring that it it works for the actual holders. The unitholders, a zealous for the manager. It strikes that fair balance. You did mention a bit of political risk there. One of your only answer, Nike. Remember it was 2016 just after the Brexit vote. There was quite a lot of the open ended funds. Got what so called gated people weren't able to get their money out, talk us through what happened. What what were the lessons that got learned then? Or perhaps investors have forgotten who were an open ended property funds. Okay, so it's probably worthwhile just reemphasizing that in 2016 there was a liquidity event which did cause some funds to spend. It's interesting to compare that thio 2000 and 7 2008 with global financial crisis where none of the authorised funds actually suspended, they were able to offload liquidity. So what's the big difference between the two? The big difference is that the investors in 2016 become a lot more concentrated. Those big multi manages out where falling RTR changes were bigger players when they moved money. There was just too much money in multi managers. Buk Property Fund is slightly different makeup. We invest with smaller, longer term investors in the fund on we ensure that no one has more than 567% of the fund at any one time, which I'm limits concentration risk given you've got quite a liquid underlying asset classes. Property? Is that suitable for a daily dealing vehicle? Fundamentally, Yes. As a said, look we didn't spend previously. There was a very small peer group is suspended and then reopened. Portly. None of the investors really lost any money during that time. It was a matter of building up their liquid see before reopening again, and it's it worked quite successfully. Obviously, people have voted with their feet. Funds, which didn't suspend, tended to attract more money over the last few years, but importantly for us. It's getting the right type of holders in the fund we're looking for is pinch from funds. People allocating money on the bench from Wykes. They're typically going to be a long term holder. People often say, Well, is liquidity enough? A 15%? Well, most people I know investing for 5 10 15 maybe 2030 years. If it represents 5 10 15% of an overall portfolio, Um, they don't need that money back any time soon, so the vehicle is very suitable for long term investors. Thank you. Who would a closed end property fund be suitable for in the round? What are the types investors it should appeal to and why? But again, I think with closed end, it's about long term investment. You know, we're a long term investor on the clothes ended. Nature of the structure supports us in taking long term positions on properties, you know, as a listed trust were listed on the London Stock Exchange and then it gives it that gives investors a degree off liquidity. Now that liquidity may vary, You know, at the moment we're running at a discount to the Navy as any listed vehicle that has an exposure to retail is, as I said earlier, that's based on the direction of travel for retail valleys, the direction of travel on the on the overall discount, maybe debated. But devil principle, I think, is fair, and therefore they're not always fully liquid exposed. But that's the same for any list of business. And what's our cash position, given that this is a share? So if I wanted to get out of your fund, I would have to sell my share, toe another person, the market. We could argue over the price of that, but I could get out, given the underlying portfolio doesn't have that problem of redemptions. What cash position would you run in the fund? Typically? Well, we always have to keep a cash buffer, you know, business plan constantly. We look at the casual climate for the properties, whether we're reinvesting in the property or whether we're looking at the point in the cycle and think it's a good opportunity to invest in further opportunities. We do have a rolling debt facility to that means that we can invest if we don't have a high cash position so typically would look at safe baby five, maybe 10% maximum at any one time, but probably probably typically lower. You mentioned you could borrow our gear in the poor fellow. Typically, what's considered to be a sensible level get of gearing in a closed end of fundamental property we take a pretty conservative approach to gearing were just around 20% of the moment on. We think that creative to performance we're not expecting or intending to increase that waiting. And I think anyway, once you get past around 30% gearing, your risk adjusted returns are a marginally decline. One of the's stories you always hear from the investment trust industry is the ability to keep some of the income back so you can smooth it out over time. Is it how stronger part of the story is that particularly, I think, within property. The closer the structure of the most beautiful favors the report from Memories one where you have to pay out, you get the status, but you gotta pay out most of the income. We pretty much distribute most pretty much all of our income. The regime means that you have to distribute 90% so that's in in line with our with our structure on the regime in general suits the structure of the fund. You know, the other criteria, such as 30% development exposure, were conservatively round. Trust our development exposure. The moment is pretty much zero, but maximum, I've got to say 5%. So therefore, again, none of the regime rules set any challenges to us. Really. One other quick thing on the clothes since it was his investment trusts have got boards, so you're running the money. But what influences the board have on strategy policy holding you to account? Absolutely. But our border nonexecutive directors on. Therefore, it's a governing roll. A supposed to an executive role. I really it's checks and balances to ensure that we're governed appropriately. Whether so, SG regime, whether that's our strategy, is being adhered to and really a checks and balances approach. They're very experienced sets of individuals, and we meet on a quarterly basis or more regular where were required, which speaking one of those points from earlier property is quite a liquid asset classes rounds on Matt. For that, you have to trading property shares is quite hard to know what the Navy is on Do you know the discount on every? How should investors think about that? Okay, so how open ended funds actually valued? We have an independent value of light frank for us. Currently, they value the fund on a monthly basis. It's totally independent. Yes, we do. Fill in information for them on a monthly basis. Keeping updated on asset management initiatives, which may affect value. Talk to them about sales or potential acquisitions on. That's the important process we go through eso. You can rely on an independent valuer to determine the unit pricing at any one time. As with property, I mean unlike you, investing in guilt, probably quite easy to flip a guilt. It's a big liquid markets not as easy to do that properties. How does that is? A fund manager? How does that change your mindset of what you want to buy? What you don't I mean, there must be time and expense involved that there just isn't that there is time and expense involved. First of all, we don't want to put yourself in a vicious position of having to force L. Any assets you want be toasting control that we do that by ensuring We have long term investors in the fund that's absolutely key to hell being the UK property fund was created. But for them or going into natural asset, the transaction period for selling assets is shortened. If you have a core quality asset with lots of income, which will be sought after in the market, it's easy to understand what a great covenant they know, how long the incomes going to come through on. Therefore, you can sell buildings in a Titan timeframe if you need to. What's a Titan time from just lots of stats out their relation. Thio How long it takes the bios on an asset. I bought an asset for 55 working days where the whole pact was there. There's a motivated seller and we could step in on by the building, but typically it can take up to two or three months. For the due diligence to be undertaken. It's important to give a potential purchasers time to look at the building, understand what they're buying, do their research on the market. So you get the best possible execution price when you can't sell the asset. And even when the market is strong Last year for selling ass, and we sold a couple in the trust. You typically get maybe 12 maybe 15 minutes for the property if it's sort after and therefore unable to get everybody around the building to see that to do their due diligence to appropriately under right, you've got to build in times that, considering you take 1 to 2 months. But given the time and expense of that, if you making an acquisition or a disposal, how does that shape your timeframe on how long you want to hold a property for presumably, ideally that the fewer times you you're trading the portfolio, the better. That's got to be absolutely. What I said earlier were long term investors way. Look at things off, see a long term basis and the clothes ended nature off. The structure supports that the rounds cost of buying and selling property are almost 9%. Therefore, we were holding for a five year whole period as a minimum. You know, our capital values, all things being equal, are depleted by almost 11 and 1/2 percent over over each year over that time, so we've got to be cognizant of that so typically our whole periods of seven, maybe 10 years and and perhaps longer. So we take a long term position. And how can you work out that you built by building? How do you know what the world's gonna look like in 10 years? So what can you do to give yourself the maximum chance that will still be honey quality building that's desirable in the year 2029? It used to just be about location, but there's obviously an actual changes out where the reference what's happening, the retail sector at the moment. So a lot of the discussions we have as an investment committee is about the changing shape of the market. Be that from flexible officers being introduced into the market now, and how we have to respond to that he changes on online actually goes bourbon that you looking infrastructure projects, how that might actually influence a location, regeneration the areas. So we've recently bought a building in Kings Cross, which we re less up higher rent taken advantage of the improvement in that area, increasing the income term or the incumbent off that building. And that's an important thing we were looking at. What's happening in that market. Regeneration projects can take a very long time to come through. They tend not to be one or two years. You're looking at 5 10 15 20 years. You have to take a very much long term approach by building where it might be unfashionable. Hold it whilst the regeneration happens and then look at X thing. Once you've caught the growth way, talk very often about buildings being future proofed. What does that mean for us? It's about picking up long, long term trends. I'm relatively new to the business. I can't claim this myself. But being Rosa business sold a lot shopping center. I think about 12 years ago, because I took a long term view on Rito. Internet sales are about 2% of overall retail sales in the UK about 10 years ago. They're now about 20% just over 20% where they end up where the equilibrium point between online and physical. We don't quite know what we know that that sector is under a degree of pressure. So it's about picking up those long term trends on, even though it's been a lot of headlines about online retail in recent years or particularly last 18 months. It's not an overnight sensation. It's been a slow burning trend. That's really bean in, trained for over 20 years on. We got over that toe that So when we launched Beemer UK Property Fund, we very much looked at cathedral towns and cities where there's tourism spend to give us a defense to the rise of online to an extent that work. But the important thing is you got that, so we'll just I saw that the market was developing further in. They want primary locations they demand from retailers were producing Way took a decision to exit some holdings and Worcester and York good locations. But we thought that actually the next that there be a decline of rents over a period of time, Never. It's sensible to get out early, so you you come by for the long term. That you shouldn't be wedded to. That strategy is that you mentioned cathedral cities that I mean what happens when you take a place like Salisbury where you know, you never awful events there a couple of years ago, but I mean that's completely outside what you can plan for if you're in someone like Salisbury. Do you just have to ride it through? Or is that a reason to make a a quick agent? Okay, you're less likely to make on the spot exits. You got a business plan, you would follow it through. We're investing for the fundamental. So we have to see through short term political or one off events which might affect a region on dhe. Say, actually, what's the fundamentals demand to supply in that area over 5 10 15 years, period? Because that's going to drive rents. And that's the important that spike. Clearly, flexibility is a really important part of this once you got the building. So what are some of the things that you can do that add value to that building over time is probably call the asset management. Yes, certainly. Well, I was cool. The asset management life, blood while business is what drives performance off our assets and that beam Oh, we have a best in class asset management team. So they're working relentlessly on generating Valium, securing the value off those assets. So, first and foremost, it's really important to understand the markets that they work in tow, understand? the tenants what the tenants want and therefore women reinvesting capital on the property. They're doing that they're doing so on appropriate basis. So the things we can do, I take, say, for example, our officers portfolio. The office market is evolving. There's a lot of noise and headlines that moments about serviced offices, for example, but the majority the market still take so called growing up leases on bigger space. But those occupies that may have bean in serviced offices are graduating into a bigger space. They want a certain degree off service that they've been used to. So at the moment in our office, bought very pro. We typically offer plug and play space where we put the connectivity in advance. Perfect. Put in some of the furniture and the desks etcetera so the tenants can move in and get to work a lot quicker. Now they may be taking slightly shorter leases, but they're paying a high rent for that. And that's responding to change because we're responding to what the tenants want once and ultimately were a service industry, and the asset managers can also managed downside risk. We had a home base going into a CV A last year, but we're aware of it and we could. Therefore, Ford plant So Retail warehousing asset management team decided to the risk. One of my assets was in Ipswich let homebase short term income, but they were able to agree a new lease with being a M on a 10 year term ahead of any problems happening with home base, so called an insurance lease. What did that do that underpin value for the asset UN depend on income return and therefore managed the risk? And that's the important side. It's not just always adding value, which they dio extremely well. But what they are doing also is actually preserving value your face with more difficult situation on. A good example of that would be Newberry Retail Park, which is the large retail part that the trust own. We had quite a tough year last year. We were subject to three CVS and one administration. We lost mother care. We lost home base, but since then we signed leases to little hobby crafts indictment. Shoes on hasn't been easy and it's come at a cost and it's taken some time. But with the work that we put into the assets. The work from the asset management team, the relationship they have with the occupies that we can provide the right space for the right occupied. So did these potential buyers know that they about Newbury Park or is it about you going out saying, Guys, you really want to come here? I mean, how much of its push? How much is pool? But it's a bit of both. I mean retailers, for example, that very well advised that they typically have in House Property Team, so they know the market's pretty well on that supports them in their negotiations to. But we get advised on board and we have property agents which looked to let our property again. Well, we like to think we choose the right kind of agents. We have the relationships where they're gonna work hard for us on a well skilled to service the specific property that they're letting. But then when they attract the market, the property, it's then typically it's conversation led and it's about the relationships you might have with those tenants and that are they comfortable that they're going to get the right landlord. He's gonna respond correctly into their to their needs. But fundamentally, it's having buildings in the right location s. Oh, there's lots of ways around that retail space, but you can pick winners. We have an asset in Winchester, where we've just re let it at a high rent after only two weeks of a void. Why? Because your asset management team were in touch of the market. You who? Who was potentially out there to go in there and it backed in Edinburgh, where a moment discussing a surrender of release and grant of a new lease at a high rent than the existing occupies paying. That's important aspect. You can still move rents on there in the right location, but structurally, the whole market is challenged exactly, and I've said earlier that our asset management team are working very hard. It's a It's a privileged position to be in to be ableto work hard because most retailers, for example, are slimming down their portfolios, slimming down the size of units that they're they're occupying. And therefore, if they're attracted to your park, that means generally it's a good it's a good testament to the strength of that location, and when you touched on it here, but I want the next 2 to 3 minutes to talk through what some of the changes are in property. The structural changes that are going on because it's way talk about an asset class. It also implies it's static, and it's not a lot happening under the bonnet. So in terms of the long term trends got its start with you. What are the main ones that you you're focused on? The big one is obviously retail space. At the moment. It represents 35% of the overall index on shopping centers. Up and down the country are being decimated in those secondary towns and cities, and that's something you could be really a well against. That, I suppose, is about repurposing how you can ask it, manage your way through that Andi, even where you do have a property. Nice thing about it. It's a real asset on dhe. People are turning their to attention to what the alternative uses are. So one of the best performing assets for myself is actually a retail warehouse. It's in retail. It should be challenged, actually delivered 30% last year. We're working up a scheme to put 200 units on that too 100 flats on it, absolutely perfect. You got a nice income stream and then upside for a residential scheme in due course, repositioning assets that could be a little important on So one of the major themes we always talk about is actually what the alternatives for a particular building. You're not just buying a fixed killing, a building with a fixed income stream. You're saying, What are the uses? You can put it to you. I think it's important to step back and remember that markets always evolved. You know, if we jump back 40 years, retail warehouses didn't really exist in the UK It was really a kind of late eighties. Early nineties was a boom and Rita warehousing a concept came from North America. So it's important to remember that these markets always evolves. So if retail warehouses now being repurposed for form or leisure use, perhaps, or repurpose for industrial or even residential again, these are inevitable changes, and, I think even say, the office space. If you go back to the late nineties earlytwo thousands, there was a bit of a doomsday feeling about home working because of the technology on dhe. Increased communications enabled it. People wanted you no way where we need to occupy offices anymore. But of course we do, because it's a human communication. Human contact is a fundamental part of business, but the to work in harmony. And there's much more flexible working and perhaps smaller, smaller office floor plates for for occupies. But again, it's a long term trend that something that kicked off really 2025 years ago, but they never stay static for long. What about SG that seems making a really big impact, particularly Institutional Spice? Actually, it's It's cross the peace. I'm out talking to investors the whole time about the SG credentials or property funds. Nice thing about properties. You can actually intervene on the ground. But it's important not only to the investors are really important to us, but also to the occupiers. What you got to do is make sure you address it across the peace fund level, but also when you're managing a building. So we've been doing it for many years now, across across the piece. When we're buying a building, we review it to see how we can improve that asset When they operate the building. How we can run it exceptionally efficiently on doll so it can take. You can use it to make decisions, sell an asset, maybe fill this increased flood risk in an area because flood maps have changed. Then you might actually review that holding because the flood flood Max my, indicate that it's a one in 100 year floods. Man previously is one in 1000 years. So you responding constantly to that. We review each of our buildings once a year have a thorough review from the SD perspective. Look how we can improve it. It's just not the environmental side. The beam, a UK property fund, has bean having hundreds of renewable energy for many years now, both electricity and gas. So we'll sort of take that box in relation to the energy. We're very much looking at the social side now, So we were first fun to be accredited with living wage. Next year, we hope to be introducing Sarah Waste the landfill on our big initiative for 2021 will be single use plastics free and how we operate our buildings. So you never stand still on. Do you just want to improve constantly, and that's being reflected in our improved grasp scores. I must ask if somebody does a lot of out about shopping every shop ever go to. They always leave the door wide open and the heating on in winter. Can you? As a landlord. So, people, actually, that's really not very green thing to do. You must now must shut your front door. Okay, so we have quite a lot of engagement with our occupies. We try and improve their recycling within within schemes. But some operational issues are very difficult to do on the ground. We have bean leading the charge in relation to including green least clauses in there where we're trying to ensure that the occupiers used their buildings and a very responsible way for me, it's a matter of engagement. Speaking with people on the ground, I'm trying to get them to change their ways. Yes, she probably has a huge role to play in the S G. A. I mean, you think about the built environment. The quality of where people live, work and play is based on the quality of the attractiveness of the built environment. The real estate that we we own manager on develop. I think the challenge for the industry off late has also being about the date of the recording of data, because there's bean limitations in what data you hold his landlord. And once you can get that to a quality level of consistent level of reporting, then you can start benchmarking yourself. Then you can start setting targets. Tangible targets. You can measure yourself gates and improved so big parts off the SG agenda, the G being governance about the overall governance and making sure the effort is put in on the right resources there to be able to respond and control your data and performance just to sum up. Because we talked through a lot about the asset class ways of running money. If investors thinking about putting money, the property fund manager get thought from each of you, what would your tips be for what they should think about before they commit the cash first full Really think how you're using that part of your wider portfolio? Is it a nest allocation call? What level of volatility you're looking for? Andi, how long you're likely to be holding the asset because that will determine the type of vehicle you should be entering. But actually, the big thing about property is its income on DDE that will continue to flow on. Dhe will be a great addition to anyone's portfolio. Well, I think it's important. Thio, look at the manager. Look at the resource is our manager. Can they do they have the inhouse expertise to fulfill the strategy which they set out to achieve? I think that's very important. It's important to look at that beyond the long term success record off that off that house. But also what are the requirements for the investor, you know? Do they have a specific sector that they I have got strong research on? They want to act on? So they want a more conservative, conservatively run balanced portfolio such a trust. So I think probably generates a long term investment. We have to leave it there. God, Lover Howard, Thank you both very much. Thank you. Thank you. In order to consider the viewing of this video as structured learning, you must complete the reflective statement to demonstrate what you've learned on its relevance to you. By the end of this academia session, you'll be able to understand and to describe the characteristics of UK property as a portfolio. Diversify the pros and cons of open ended and closed ended real estate funds on how fund managers look to ensure liquidity in their portfolios. Please completely reflective statement to validate your CPD.