Scottish Widows Investment Partnership Property Trust

The SWIP Property Trust aims to provide investors with a total return by investing in a balanced portfolio of commercial property. Following the recent correction in the property market, it is apparent that income will be the major contributor to fund returns over the next few years.

The fund will exploit opportunities across a broad spectrum of commercial property in search of profitable occupiers.Gerry Ferguson, Fund Manager at SWIP, joined the company in September 2000 and manages the Investment Property Trust. He believes there are marked signs that the UK commercial property market is starting to stabilise. Capital values fell by just 0.9% in June - the lowest rate of decline since August 2007. In the two years since the downturn began, values have fallen over 44.1% and are now back to levels not seen since August 1988. The current feeling is that the commercial property market has reached the bottom of its downward movement and due to tight credit conditions and lack of supply; prices in certain areas are starting to increase.


The fund currently has £300 million in cash and is using this to capitalise on reduced value, high quality property. The fund recently purchased a retail park in Edinburgh for £66 million. The property is a prime retail warehouse park offering high income and excellent tenants such as Tesco, B&Q, and Halfords. This generates an annual income of approximately £4.7 million and has good prospects for future income growth.

Property decline has been at the forefront of this economic recession and it is unlikely that prices will grow at the pre crisis rate for sometime. However, this fund has a broad-range of property and has sustainable income for tenants to make it suitable for a low risk approach.