Coal Pension Trustees is looking to invest in the UK鈥檚 private-rented sector (PRS), according to its head of investment strategy.
William Dinning told delegates at this year鈥檚 IPD/IPF Property Investment Conference in Brighton that the fund is considering a move into the increasingly popular housing market.
鈥淲e are starting to get into residential,鈥� he said. 鈥淚 can see us developing in residential the way we have with commercial 鈥� it could be 10% of our overall allocation.鈥�
PRS is interesting for the UK鈥檚 closed coal industry pension fund, Dinning said, as 鈥渁nother way to access a cash-producing asset鈥�.
鈥淎nything that gives us an inflation hedge is attractive for us,鈥� he said.
The potential for political instability should the UK exit the EU was raised as a possible reason for investors to shun the country鈥檚 commercial and residential sectors.
Dinning, however, said 鈥楤rexit鈥� was not an issue for long-term investors, echoing the sentiments at last month鈥檚 closed-door RE-Invest summit at MIPIM UK event, as reported .
Goh Kok Huat, president and chief operating officer of GIC Real Estate, agreed.
鈥滲eing long-term means you can handle risks, unless you believe that those risks have a long-term impact,鈥� he said. 鈥淚t鈥檚 still early days, it has not stopped us and we have not shied away.鈥�
Grosvenor Fund Management managing director Nick Preston said events such as Brexit can threaten sentiment, but 鈥渕ostly turn out to be a damp squib鈥�.
鈥淚t will balance out in the long run, business will go on as normal,鈥� he said.
Coal Trustees, Dinning said, likes UK property for its liability matching, with its 250,000 members being paid in sterling.
鈥淲e continue to be positive on UK commercial property, we鈥檙e comfortable with the income stream,鈥� he said.
鈥淲e are not 鈥檒ittle Englanders鈥� though; we own real estate companies globally and want to take advantage of global real estate. But we have to do it in the best way.鈥�
Global commercial property, however, does 鈥漬ot come top of our list of areas we feel we could be missing out on鈥�, Dinning said, warning that there is a risk of making 鈥渓ate cycle mistakes鈥� at a time of low yields.
