Ricky Chan, director at IFS Wealth & Pensions, agreed. He said it would “certainly be more beneficial to investors and fund managers alike” than the 180-day wait.
Potential problems
Other experts were quick to remind investors that Reits were not without their own problems and issues.
Ben Seager-Scott, multi-asset manager at Tilney, said Reits appeared like an “attractive option” but argued the same challenges persisted in a “different form”.
He said: “You still need to find a willing buyer if you’re trying to sell. In the midst of a crisis when open-ended funds are gated, in theory you could still sell your Reits, but at something like a 20 per cent discount.
“That’s a pretty steep penalty to be paying, and many investors would likely feel ‘stuck’ with the position until it recovered anyway.”
Property is typically used as a diversifying asset against stock market volatility, often behaving to contradictory or unrelated trends.
But Adrian Lowcock, head of personal investing at Willis Owen, flagged that as Reits were listed on the stock exchange, they were likely to share characteristics of equities so could be “just as volatile” and offer “little diversification benefits”.
Ben Yearsley, investment consultant at Fairview Investing, was less worried about the stock market.
He said: “I have changed my mind over the past 18 months. In the past, I considered [Reits] as ‘not real property’ as investors were often getting stock market volatility over the short-term, but frankly, so what?
“You are still getting returns driven by the underlying property over the long term.”
imogen.tew@ft.com
On September 29, FTAdviser will be a running a CPD webinar discussing property's future role in advisers' portfolios. Click here register and to find out more.
