Warehouse sales propel Advent Capital Investments Ltd Property Income Trust for Charities’ performance

The Property Income Trust for Charities (PITCH), managed by Advent Capital Investments Ltd, has completed a successful sale strategy to capitalise on the strength of the warehouse market and drive strong fund performance.

The specialist Fund for charities launched four warehouse sales during H1 2021 in Peterborough, Manchester, Yeovil and March. The four assets attracted strong investor interest from a multitude of domestic and international buyers and achieved a final aggregate price of £40.2m, representing a capital gain of £7.4m.

The sale strategy allowed the Fund to upgrade the composition of its industrial weighting, which had risen to 44% as at Q1 2021. Following the sales, the Fund acquired two modern well-connected warehouse assets in Q2 in Avonmouth and Northampton and, in the process, increased the industrial weighting to 47% of portfolio value, by the end of Q2 2021. This ensures the portfolio is well positioned to capitalise on the continued strength of the industrial market and deliver attractive returns to investors.

The success of this strategy, along with other gains from asset management and strong rental growth across its other warehouse holdings, helped to deliver total valuation growth of 4.3% over the quarter. Together with income and the positive contribution of gearing, this equated to a total return of 5.7% for Q2, which was the third best performing return of all 29 funds in the MSCI/AREF All Balanced Property Fund. In the 12 months to 30th June 2021, PITCH has returned 8.9%, with an annualised return of 4%, 6.2% and 8% over three, five and ten years respectively. It is now also the third best performing fund in the same Index over ten years.

PITCH’s thematic approach seeks to ensure its buildings are aligned with occupational demand both now and into the future. This disciplined investment approach comprises a proprietary asset scoring model that grades each asset according to five core themes: i) Change & Disruption; ii) Climate & Environment; iii) Communities & Clustering; iv) Consumers & Lifestyle and v) Connectivity.

Simon Martindale, fund director of the Property Income Trust for Charities, commented “After undertaking a thorough portfolio review at the beginning of the year we capitalised on the continued strength of the warehouse market to sell these assets at a significant premium to prior valuations. This was made possible by the Fund’s long term, high weighting to the sector. We believe our portfolio is now optimised to the demands of occupiers today and into the future in line with our thematic approach, so we expect our portfolio to build on the strong performance witnessed over the first half of the year.”