REITs were launched on January 1st but it is HBOS which is pioneering the trusts with a portfolio of around 2,000 houses and flats in the London area.
New legislation which has come into force makes it easier for investors to put their money into both residential and commercial property in Britain.
Kim North, spokesperson for Reita, said: “It’s funny that one because the yields coming off the sales of British Land and Land Securities, the biggest two commercial property companies, is apparently about 3.5 per cent.
“On residential property some of the rental yields are a lot higher some of the properties in the better areas of the UK have seen yields of eight to ten per cent or even higher.”
She added that investors are therefore going to get higher yields off some of the residential portfolios.
Some financial experts say that unlike commercial property where a lot of the yield will come from rental income, a residential REIT will be more reliant on house prices rising strongly over the coming years.
Adfero Ltd
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