Top 20 UK REITs for you: July 2023

In this post, we delve into the world of Real Estate Investment Trusts (REITs),unravelling a top 20 list of the most prominent REITs in the UK for 2023. We shine a spotlight on each entity's unique portfolio, strategic approaches, and market distinction. Offering a deeper understanding of the dynamic property market, we hope this piece ignites your interest and fuels informed decisions. If you are new to REITs, why not try our 101 guide here? Stay tuned as we explore the UK's REIT landscape in-depth.

An overview of the market

We have picked the top 20 REITs (by market cap) listed on the UKs FTSE 100 and FTSE 250 exchanges as the basis for our analysis. We believe the blue chip prestige and scale of these companies are your best bets for REIT investments. Our information is taken from July 2023.

Together these 20 REITs have a combined market cap of £46.2 billion - which may sound a lot but for comparison purposes is only roughly 2.4% of the total FTSE 100 market cap. Our smallest REIT assessed was Urban Logistics with a market cap of £589m and the largest Segro over 16 times the size with a £9.6bn market cap.

We have analysed the total market cap of these 20 REITS in the graph below - the top 5 players make up over 50% of this, something worth noting if looking to diversify your risk.

What do these REITs do?

Most of the REITs we looked at own a vast number of properties, often across a variety of uses. We have tried to place them in broad buckets overall, coming up with 7 categories

1. Commercial, making up 30.8% of the market cap of the top 20 REITs analysed, has 7 REITs. A prime example of a company in this sector is Land Securities Group PLC, which owns the iconic 20 Fenchurch Street (also known as the "Walkie Talkie"), a distinctive commercial skyscraper in London.

2. Industrial, contributing 26.7% to the market cap of the top 20 REITs analysed, has 4 REITs. SEGRO PLC exemplifies this sector with its significant asset, The Slough Trading Estate in Slough, one of Europe's largest business parks.

3. Residential (Student Accommodations), contributing 7.0% to the market cap of the top 20 REITs analysed, is represented by one company, Unite Group PLC. One of their notable properties is Sky Plaza in Leeds, one of the tallest student accommodation buildings in the world.

4. Retail, making up 20.2% of the market cap of the top 20 REITs analysed, includes 5 REITs.

5. Healthcare, contributing 5.1% to the market cap of the top 20 REITs analysed, includes 2 REITs.

6. Self-Storage, making up 7.2% of the market cap of the top 20 REITs analysed, is represented by 2 REITs. Big Yellow Group PLC operates in this sector and is renowned for its flagship self-storage building in Kennington, London.

7. Diversified Portfolio, contributing 3.0% to the market cap of the top 20 REITs analysed, is represented by a single REIT, LXI REIT PLC. This company has a broad range of properties, including a Prezzo restaurant in Newquay and a Travelodge in Thrapston, illustrating the diversity of its holdings - maybe one to add if you are looking on a diversification pathway.

Top 3 reasons to invest in REITs

Before we dive into the detail, lets quickly explore some key reasosn you may want to add REITs to your invetsment protflio;

1. High Dividend Yields: UK-based REITs provide impressive dividend yields. REITS are legally required to distribute at least 90% of their profits to shareholders, they offer a consistent income stream, especially appealing in times of economic uncertainty.

2. Diversification: Investing in a UK-based REIT gives exposure to the property market, diversifying an investor's portfolio - as real estate often performs differently to stocks. REITs spread risk across various property types such as commercial, industrial, and residential real estate.

3. Liquidity and Accessibility: REITs, traded on major stock exchanges, are highly liquid and easily accessible to all investor types - indeed some of the REITs in this analysis trade for less than £1 a share. This brings the property market within reach of many, offering flexibility that direct property investments often lack. If you need your money you easily sell your shares within minutes, unlike investing directly into a Buy To let.

The top 20 UK REITS listed;

So lets get to business, what are the top 20 UK REITs we think could make a good addition to an investment portfolio in 2023?

SEGRO PLC

• Market Cap: £9,674.38 million, Share Price: 785.4p. Starting with SEGRO - the largest REIT in our list, who specialise in the ownership, management, and development of modern warehousing and light industrial properties throughout Europe.

LAND SECURITIES GROUP PLC

• Market Cap: £4,907.57 million, Share Price: 658.8p. Secondly we have Land Securities who are the UK's largest commercial property development and investment company, with a portfolio of diverse high-quality offices and retail assets. They boast an impressive dividend yield of 5.86% at the time of writing.

UNITE GROUP PLC

• Market Cap: £3,850.13 million, Share Price: 955.5p. Unite Group specializes in student accommodation across key university towns and cities in the UK.

Lets dive in a bit more here, for what I think is the most interesting REIT in the UK right now. Unite Group own 157 student properties across 23 cities in England, Scotland and Wales. Unite continues to invest in its operation opening Hayloft Point in central London for the start of the 2022/23 academic year - a flagship £190m building for over 900 students.

Unite are looking to the future and are actively buying well-located development sites in Bath, Bristol, Durham, Edinburgh, Glasgow (west end), London and Nottingham. Unite Group provides you with a passive mechanism to invest in the student property boom without the hassle of property management and dealing with the fallout of student house parties yourself. With 2.86 million students at UK higher education institutions, surely this is a market here to stay.

BRITISH LAND CO PLC

• Market Cap: £3,253.13 million, Share Price: 345.9p. British Land Company is a leading property development and investment company with a diverse portfolio that includes retail parks, superstores, shopping centres, and premium office buildings.

TRITAX BIG BOX REIT PLC

• Market Cap: £2,621.96 million, Share Price: 141p. Tritax Big Box is a REIT focused on investing in and managing very large, modern, and efficient logistics facilities in the UK.

Tritax Big Box are an interesting case study, having experienced a surge in their share price in the years following the outbreak of Covid - influenced by the demand for the companies they support, including Amazon. However, their share price has fallen since a high in April 2022 - maybe now s a good time to buy back in?

DERWENT LONDON PLC

• Market Cap: £2,537.77 million, Share Price: 2,228.00p. Derwent London owns a portfolio of commercial real estate predominantly in central London. They are known for their design-led approach.

SHAFTESBURY CAPITAL PLC

• Market Cap: £2,466.85 million, Share Price: 127.1p. Shaftesbury Capital owns an array of properties in the heart of London's West End. Their portfolio spans shopping, leisure, and entertainment sectors.

BIG YELLOW GROUP PLC

• Market Cap: £2,003.31 million, Share Price: 1,069.00p. Big Yellow Group is a leading player in the self-storage sector, owning and operating numerous storage facilities across the UK.

SAFESTORE HOLDINGS PLC

• Market Cap: £1,975.14 million, Share Price: 904p. Safestore Holdings is another major self-storage company, with a wide network of facilities in the UK and Europe.

LONDONMETRIC PROPERTY PLC

• Market Cap: £1,819.60 million, Share Price: 183.6p. LondonMetric Property is a FTSE 250 REIT specialising in distribution, retail, and residential property investment across the UK.

LXI REIT PLC

• Market Cap: £1,654.47 million, Share Price: 95.85p. LXI REIT is a diversified investment REIT with a focus on the UK commercial property market.

ASSURA PLC

• Market Cap: £1,457.75 million, Share Price: 48.98p. Assura operates in the primary care property sector, building, managing, and maintaining healthcare centres throughout the UK.

PRIMARY HEALTH PROPERTIES PLC

• Market Cap: £1,323.13 million, Share Price: 98.55p. Primary Health Properties is a REIT specialising in primary healthcare facilities. Their portfolio includes GP surgeries, NHS centres, and pharmacies across the UK and Ireland.

HAMMERSON PLC

• Market Cap: £1,273.62 million, Share Price: 25.24p. Hammerson is an owner, manager, and developer of retail destinations across Europe.

GREAT PORTLAND ESTATES PLC

• Market Cap: £1,108.90 million, Share Price: 435p. Great Portland Estates focuses on properties in central London. Their portfolio comprises of a mix of office, retail, and residential properties.

WORKSPACE GROUP PLC

• Market Cap: £1,015.68 million, Share Price: 523p. Workspace Group provides flexible office, co-working, and meeting spaces in London, catering primarily to new and growing companies.

With the move to hybrid working and the push to dispose of large corporate offices this REIT may be in a great position to capitalise on a fast changing commercial office market.

SIRIUS REAL ESTATE LD

• Market Cap: £988.11 million, Share Price: 82.35p. Sirius Real Estate is a leading operator of branded business parks, providing conventional space and flexible workspace in Germany.

SUPERMARKET INCOME REIT PLC

• Market Cap: £977.05 million, Share Price: 78.7p. Supermarket Income REIT invests in a diversified portfolio of supermarket sites across the UK.

UK COMMERCIAL PROPERTY REIT LIMITED

• Market Cap: £704.28 million, Share Price: 53.5p. UK Commercial Property REIT Limited invests in a diversified portfolio of commercial real estate throughout the UK.

URBAN LOGISTICS REIT PLC

• Market Cap: £589.03 million, Share Price: 122.6p. And last but not least ... Urban Logistics REIT is focused on the acquisition and management of strategically located logistics properties across the UK.

Conclusion

In conclusion, the variety of REITs offers a unique and often profitable avenue for investments, with a broad diversity in property portfolios. From warehousing to retail, office spaces to healthcare facilities, the UK's REIT landscape is as diverse as it is rich. The robust nature of the property market underlines REITs place as a fundamental segment in a balanced investment portfolio. What did you think? Going to buy any of these REITs, let us know in the comments. Thanks for reading another blog post on ProsperousPounds - your one stop shop for all things finance and investing, written by an average Joe in the UK.

Looking for more? Why not try our detailed 2,000 word plus guide for all things REITs here.

Disclaimer:

The content provided in this blog post is for informational purposes only, making it a point of reference and not adapted to personal circumstances. It does not constitute financial, investment, or any other type of advice, nor does it contain a comprehensive analysis of the mentioned Real Estate Investment Trust (REIT) companies.

The author of this blog post has no affiliation with any of the companies mentioned herein, and the opinions expressed are entirely personal, based on publicly available information at the time of writing, and not influenced by the companies themselves. At the time of writing he does not own, directly, shares in any of these REITs.

The information included may contain inaccuracies or be outdated, given the nature of financial markets and the volatility of circumstances surrounding REIT companies. The author does not guarantee the accuracy or the completeness of any information on the site or found by following any link on this site.

Investment decisions should never be made based on the content of this blog post. Always consult with a licensed financial or investment advisor before making any investment decisions. It is essential to perform due diligence and/or consult with financial professionals before making any financial decisions.

The author will not be liable for any errors or omissions in this information nor for the availability of this information and will not be liable for any losses, injuries, or damages from the display or use of this information. Your use of the information contained herein is at your own risk.