Property is a unique asset class and offers benefits to a wide range of investors. As a real or tangible asset, it has strengths and weaknesses that other asset classes do not. At Royal London Asset Management, we focus on maximising those strengths while being aware of and mitigating the weaknesses.
Property has been a key investment for Royal London for decades. As a result, we are one of the largest landlords in the UK with around £8 billion of assets under management (as at end September 2023, subject to rounding) and a strong performance record. We manage mature portfolios of sizeable prime properties, mainly commercial, and our aim is to make the most of these assets through active management and development.
We see property as a truly long-term investment. This focus helps offset the lower liquidity and higher transaction costs of the asset class, but we believe that this gives us time to realise the full potential of each property we own, whether that is through improving the quality of that asset and the income it produces, or selling it when market conditions are favourable.
Our portfolios focus on prime assets - higher quality properties in attractive areas that produce higher rental income - with a bias towards London and the South-East of England. Prime assets can be strongly defensive in a downturn, while an upturn can drive higher rents and the opportunity to improve the assets.
A strong team is an essential part of a successful property franchise. We have a small team of highly experienced professionals. Property as an asset class is a real, tangible asset, which has to be actively managed. The lifecycle of property management is something our team understands very well, and we have sector specialists covering retail property, central London offices, industrial property and alternatives.
We aim to own, build, or acquire the best quality property in prime locations, focusing on larger lot sizes in London and the UK’s south-east. Acquiring property involves a thorough due diligence process to ensure every acquisition is a sound one. Building a new property requires a planning and tendering process, then the managing of construction work and hiring of designers.
Our leasing process involves a detailed analysis of the financial strength of the tenants, something we can call on our experts to conduct. Leasing also involves regular refurbishment programmes to ensure we can attract the best tenants at the maximum rent.
Realising the full potential of a property investment can take years, so we encourage our investors to see this as a long-term investment. Holding for the longer term means we can reduce costs and maximise returns.
Royal London UK Real Estate Fund
This is a large and diversified portfolio of UK-based commercial property that has been built up over many decades.
Investing in this fund gives an investor access to a range of prime assets that would otherwise be difficult to acquire, as prime properties of this kind rarely come to market.
The combined assets of the Fund are around £3.2 billion, with an annual rental income in excess of £104 million (as at 30 September 2023, subject to rounding).
Royal London Property Fund/ Royal London Property Trust
The aim of the fund and the trust is to carry out property investment in the UK, with the majority of the holdings in London and the south-east.
We manage property actively and effectively, buying or building large prime properties and then letting or selling them, according to what we believe will provide the best return on our investment. When our properties are let, the financial strength of our tenants is carefully assessed by our in-house analysts.
Responsible property investment
We are committed to being a responsible and sustainable investor and manager and look to minimise the impact our properties have upon the environment. We take our commitment to the environment very seriously. As developers and landlords, we are in a position to make a difference.
We are making every effort to reduce the energy demand of our properties and developments, and the waste that is produced by them. We also carefully monitor our use of natural resources.