Then there’s the unfavourable tax regime surrounding buy-to-let property, and the sheer inconvenience of having to buy, maintain and operate a tenanted property. Hassle, hassle, hassle – no thanks! And at the end of it all, there’s no guarantee that you’ll actually make any money from buying and letting a property. With interest rates looking like they could be on the cusp of an uptrend, property prices could fall or stagnate, meaning that erosion of the buying power of your capital could wipe out any gains you manage to make from collecting rent.

A dynamic, high-return property portfolio

Instead of all that bother, I’d rather invest in the property companies listed on the London stock exchange, such as LondonMetric Property (LSE: LMP). The company aims to generate “repetitive and growing” income streams by owning properties in tune with “modern shopping habits.” And one of the biggest habits is the shift to digital retailing, which has contributed to the decline in bricks-and-mortar retailing. LondonMetric has responded by shifting from shopping centre and retail outlet ownership to the distribution centres and “long-term income assets” that currently fill the property portfolio.

The directors claim to be “unemotional” about the properties owned by the company and periodically review each investment. If the projected forward returns don’t measure up, the property is sold and the funds reinvested into a better asset. That sounds like a robust investment strategy to me, and it should keep the firm earning the best returns even as the retail environment evolves over time.

The forecast dividend yield runs at 4.5% or so and price-to-tangible book value is around 1.13. I think the valuation is attractive for what looks like such a well-run and dynamic property firm. But I also like the look of UK Commercial Property REIT (LSE: UKCM), which owns “a diversified portfolio of high-quality income-producing UK commercial property” spread across the UK.

Big in industrials

The company has a high weighting in industrial property, which includes logistics distribution. The directors said in the recent half-year report that industrial property was the driver of outperformance in the firm’s financial returns. The strategy chimes with that of LondonMetric Property, so it seems that both firms have migrated to areas of the market that are performing the strongest.

However, UK Commercial Property also has investments in the Office sector, the Retail sector and the Leisure sector, so there is a bit more diversity in the property portfolio. The dividend yield runs close to 4.3% and the shares trade around 0.89 times tangible book value. I think that shares in both of these property companies would sit well in a stocks and shares ISA and could make a good alternative to investing in buy-to-let property.

The post Why bother with buy-to-let when you could own these 2 promising property shares? appeared first on The Twelfth Magpie.

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• £25,000 invested in a SIPP could be worth this much by 2055…
• Can you earn a £6,515 second income by investing £100 a month?
• UK REITs: a once-in-a-generation passive income opportunity
• How to invest £20k in 3 FTSE 100 stocks to get a stunning 7% dividend yield

Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Strong results helped LondonMetric to deliver a 3% increase in its dividends to 3.7p per share for the first half, with dividend cover up slightly from 112% in the same period last year, to 114%. Assuming a similar increase in its dividend for the remainder of the year, which would be in line with the consensus analysts’ forecasts, shares in the REIT trade on a prospective yield of 4.3%.

Demand continues to grow

LondonMetric’s property portfolio has held up better than most in the sector, helped by its focus of distribution space. Despite ongoing Brexit uncertainties, occupational demand for distribution space, both large and small, remains strong, due to the shift happening between retail and online shopping. At the same time, the company’s largely de-risked development programme has also added to income growth and valuation gains.

Looking ahead, I’m very excited about LondonMetric dividend growth potential as its future earnings prospects are underpinned by the favourable sector outlook and its attractive short cycle of new developments. It has seven properties under construction right now, with a further four in the pipeline, which could potentially add more than 1.5m sq ft to its portfolio over the next two years.

Discount

Value investors looking for an opportunity to buy into a quality REIT at a discount should probably instead consider Derwent London (LSE: DLN).

The London office-focused REIT is attractively valued, with shares trading at a 24% discount to its net asset value (NAV), despite continuing to deliver robust earnings growth and having one of most attractive development pipelines in the central London office space.

Of course, investors are concerned about the impact of Brexit, but much of Derwent London’s portfolio is in the West End or the Tech Belt in central London — locations that are typically less exposed to the financial services industry. They are also invested in assets that have low capital values and modest rents, with good medium-term potential for improvement.

And so far, Derwent London’s rents and property valuations have held up well — like-for-like net rental income increased by 5.6% in the first-half of 2017, while NAV per share increased 0.5% in 2016 to 3,551p. Further gains are likely on the successful execution of two projects for delivery in 2019. What’s more, the vacancy rate also remains very low, after falling slightly from 1.9% in June to 1.4% at the end of September.

The stock has a regular dividend yield of just 2.2% this year, but City analysts expect its forward-looking yield will climb to 2.4% by 2018.

The post A 4%+ yielder I’d consider for its dividend growth potential appeared first on The Twelfth Magpie.

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• £25,000 invested in a SIPP could be worth this much by 2055…
• Can you earn a £6,515 second income by investing £100 a month?
• UK REITs: a once-in-a-generation passive income opportunity
• How to invest £20k in 3 FTSE 100 stocks to get a stunning 7% dividend yield

Jack Tang has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Record profits

London-focused residential property developer Telford Homes (LSE: TEF) is worth a closer look following today’s announcement of record revenues and profits for the year to 31 March.

Telford’s results for the year beat expectations as pre-tax profits rose 6% to £34.1m against analysts’ consensus estimates of £33.5m. This was aided by an increase in both subsidised affordable housing revenue and build-to-rent revenue, which helped to lift total revenues for the year to £291.9m.

Despite the Brexit-related uncertainty and recent tax changes affecting individual property investors, Telford sees promising opportunities ahead, with growth supported by the strength of its development pipeline. After reflecting on record levels of revenue and profit for the year to 31 March, CEO Jon Di-Stefano reckons the company is on track to lift pre-tax profits to more than £40m in the year to March 2018 and above £50m in the year to March 2019.

Dividend growth also continues to impress, with the company today announcing a more than 10% increase in its final dividend to 8.5p a share. This brings its total dividends to 15.7p a share, which gives it a reasonable 3.7% yield.

And although its yield may not be as high as some in the sector, there’s considerably more potential for dividend growth with Telford’s shares. That’s because, the developer benefits from a strong earnings outlook over the next two years and dividends are currently equivalent to just 43% of its earnings.

Valuations are tempting too with shares in Telford Homes trading at 7.4 times expected earnings in 2018/19. And looking further ahead, the company’s long-term fundamentals are underpinned by the acute shortage of affordable housing in London. As such, I expect the developer will continue to deliver attractive returns to shareholders.

Quality assets

Also benefitting from the buoyant property market is LondonMetric Property (LSE: LMP), a REIT which specialises in urban logistics facilities and retail property.

It also announced today its full-year results for the year to March. Underlying earnings rose 5% to £51m, and EPRA net asset value (NAV) per share rose 1% to 149.8p, thanks to its exposure to resilient real estate sectors which drove steady like-for-like rental income growth and strong portfolio revaluation gains.

The REIT owns some quality assets and its portfolio demonstrates this by its sector-leading property metrics. In contrast to rising vacancy rates elsewhere, LondonMetric’s occupancy level remains very high, at 99.6%. What’s more, the company has impressive income longevity, with an unexpired lease term of 12.8 years and only 1% of its leases due to expire within the next three years.

But as with all quality companies, you have to pay a premium for its shares. At a current price of 168.5p, they trade at a premium to its NAV of 12%. However, its dividend yield is more appealing, with the shares currently yielding 4.5%.

The post Bullish on the property market? You’ll love these stocks appeared first on The Twelfth Magpie.

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Jack Tang has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Resilient performance

Reporting on Tuesday was Real Estate Investment Trust (REIT) Shaftesbury (LSE: SHB). It reported impressive performance from its 14.5 acre property portfolio in London’s West End, with good trading and footfall across all of its locations. This has driven a high level of occupier demand, with rental growth and low vacancy rates. This has helped boost its portfolio valuation by 2%, while investment in its asset base of £48.1m could help to build stronger growth in the long run.

Despite its upbeat performance in the first half of the year, Shaftesbury continues to offer a relatively cheap valuation. It trades on a price-to-book (P/B) ratio of only 1.1, which suggests its shares are undervalued at the present time. Therefore, after a five-year gain of 87%, its share price could continue to outperform the FTSE 100 in future years.

Certainly, the impact of Brexit could be somewhat negative on its financial performance. Uncertainty about the terms of the deal may lead to a lack of consumer confidence and spending even in London’s West End. However, with a low valuation and an excellent asset base, now could prove to be the right time to buy Shaftesbury.

Income potential

Also offering an attractive risk/reward ratio at the present time is property investment and development company, Londonmetric (LSE: LMP). It is forecast to deliver positive earnings growth in the next two years, and yet its shares continue to trade on a relatively low valuation. For example, they have a P/B ratio of 1.3. Given the company’s development pipeline and diversity, this seems to be relatively attractive.

Londonmetric also has income appeal for the long term. It currently yields 4.5% and is forecast to grow dividends per share at an annualised rate of almost 4% during the next two years. This means that even if inflation moves higher than its current level of 2.7%, the company should be able to beat inflation in terms of its yield and dividend growth outlook. As such, it could become a relatively popular income play over the medium term.

As with Shaftesbury, Londonmetric faces an uncertain future due in part to Brexit and the prospect of declining consumer spending. This could hurt investor confidence in the sector as a whole. However, with a wide margin of safety and a high-quality asset base, it could prove to be a profitable buy for the long term.

The post These 2 property stocks could boost your retirement prospects appeared first on The Twelfth Magpie.

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• 3 top passive income shares to consider with dividend yields above 5%
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• Can you earn a £6,515 second income by investing £100 a month?
• UK REITs: a once-in-a-generation passive income opportunity
• How to invest £20k in 3 FTSE 100 stocks to get a stunning 7% dividend yield

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Low fuel prices

By its own admission, the Perth-based business continues to suffer from weaker revenue growth in comparison to the stronger growth it has delivered over the last 10 years or so. Both in the UK and North America, growth in the bus and rail sectors has been affected by sustained low fuel prices, resulting in heightened competition from cars and airlines.

Like many large businesses, Stagecoach sees itself facing challenges as a result of the current uncertain political and economic environment, but remains upbeat about the long-term prospects for public transport. Indeed, the company sees a large market opportunity for a shift from cars to public transport against a backdrop of population growth, urbanisation, technological advancements, and increasing pressure to tackle road congestion and improve air quality.

Enviable record

The long-term outlook might be promising, but short-term challenges remain, with Stagecoach reporting a slightly disappointing set of first-half results at the end of 2016. The group’s operating profit fell 19% to £117m, with pre-tax profits coming in 17% lower than the first six months of FY 2016 at £100.4m.

Current forecasts for the company’s full-year figures don’t fare much better (pun intended), with analysts expecting the group to post a 12% dip in underlying earnings for the year to the end of April, with a further decline of 10% pencilled-in for next year. Based on this gloomy near-term outlook I think the company’s low P/E rating of nine is perhaps justified.

Despite the lack of growth in the short term, I still think the shares are worth buying for their progressive dividends. In fact, Stagecoach has the enviable record of increasing its annual payout for 15 successive years. What’s more, with the interim dividend recently hiked by 8.6% to 3.80p per share, the full-year payout is now forecast at 12.08p, giving a healthy 5.6% yield for FY 2017, rising to 6% by FY 2019. But you’ll have to hurry, the shares go ex-dividend on Thursday 9 February.

Splashing the cash

Meanwhile, another FTSE 250 firm that’s never been afraid to splash the cash when it comes to shareholder payouts is LondonMetric Property (LSE: LMP). Operating as a Real Estate Investment Trust (REIT), the mid-cap property firm is continuing with its strategy to sell-down mature retail parks with a sharpened focus on the distribution sector that offers higher growth opportunities.

LondonMetric’s dividends are forecast to increase by 0.25p per share to 7.5p for the current year to the end of March, giving a chunky prospective yield of 5.1%, rising to 5.5% by fiscal 2019. Income seekers tuck in.

The post 2 high-yield dividend stocks I’d buy right now appeared first on The Twelfth Magpie.

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• £25,000 invested in a SIPP could be worth this much by 2055…
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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has recommended Stagecoach. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

It has been doing all the right things, positioning its portfolio to benefit from the rise of online shopping rather than bricks and mortar. And it has increased its exposure to the distribution sector to 54% from 20% of its portfolio since its merger with Metric Property investments in 2013. I believe this is a good strategy and should be welcomed by investors, as the business has been quick to acknowledge that fit-for-purpose logistics will be vitally important in trying to manage increasing consumer demand for instant gratification and quicker online delivery.

Wheeling and dealing

The FTSE 250 firm recently announced that it had bought a distribution warehouse in Stevenage for £7.3m at a net initial yield of 6.25%. The 74,000 sq ft distribution warehouse is located immediately adjacent to the A1(M), on an established South East distribution park. The unit is let to Dixons Carphone for a further nine years at a rent of £6.50 per sq ft with a break clause in four years.

The Real Estate Investment Trust (REIT) has also been busy at the other end of the market, disposing of some of its more mature retails parks (the most recent being Alban Retail Park) and generating positive returns. It wants to reinvest the proceeds into investment and development opportunities within the firm’s favoured logistics sectors where rental growth prospects look more attractive. Shareholders will no doubt benefit from this policy in the long term.

In the meantime, management has decided that it’s time to increase the already generous shareholder rewards starting with a full-year dividend payout of 7.25p for FY2016, with a further improvement to 7.55p earmarked for the current year to the end of March. LondonMetric’s shares have fallen back to around 147p after peaking above 171p last year, leaving investors with a juicy 5% yield at current levels, with expectations of further dividend growth in the future.

Brexit boost

Meanwhile, fellow mid-cap property investor Hansteen Holdings (LSE: HSTN) has been enjoying the benefits of the weaker pound against the euro following the UK’s decision to leave the European Union. The London-based REIT mainly focuses on industrial property in continental Europe with assets in Germany, Belgium, France and the Netherlands, as well as the UK, with any further weakness in sterling expected to give an even bigger boost to the company’s bottom line. I believe Hansteen is in a good place. Light industrial property is generally accepted as one of the most attractive of the property sectors with high yields and robust occupational demand.

Revenues have been growing steadily over the years with the City expecting this to continue at least until 2018, by which time total revenues are projected to reach £110m. The company has been paying a progressive dividend with a full-year payout of 5.59p per share forecast for 2016, at current levels equating to a generous yield of 5.2%. Hansteen looks like a buy for income investors seeking a stable well-covered progressive dividend in the real estate sector.

The post Attention income-seekers! 5% returns available in a growth industry appeared first on The Twelfth Magpie.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has recommended Hansteen Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

ARM Holdings

At first glance microchip play ARM Holdings (LSE: ARM) may not appear an obvious candidate for dividend chasers. Like all tech stocks, the Cambridge-based business is required to plough vast sums of capital into product research and development, leaving little on the side for shareholder returns.

But in recent times ARM Holdings has vowed to return increasingly-large amounts of cash to its stakeholders, and last year raised the full-year dividend by an eye-watering 23% to 7.02p per share. And the City does not expect this strategy to cease any time soon — payouts of 8.3p and 10.1p per share are forecast for 2015 and 2016 correspondingly, yielding 0.8% and 0.9%.

While yields may still lag the FTSE 100 average of 3.5% by some distance, I reckon ARM Holdings’ increased focus on dividend yields should produce big returns in the years ahead. The chipbuilder’s dominance of the smartphone and tablet PC markets continues to pay off handsomely — earnings are expected to explode 66% in 2015 and 14% in 2016 alone, a promising sign for future payouts.

Vodafone Group

Unlike ARM Holdings, telecoms giant Vodafone (LSE: VOD) has long been a favoured income selection thanks to its sterling record of offering above-average yields. Although earnings growth has been bumpy thanks to competitive and wider macroeconomic pressures in its critical European marketplace, the firm’s ability to throw up plenty of cash has kept shareholder rewards growing year after year.

And City forecasts suggest that Vodafone should keep this policy trucking in the near-term at least. A payment of 11.22p per share for the 12 months to March 2015 is anticipated to rise to 11.5p this year, yielding a gigantic 5.2%. However, the impact of its £19 billion Project Spring organic investment programme is expected to keep the payment locked around this level in fiscal 2017.

But further out I fully expect dividends at Vodafone to chug higher again, with the costs associated with this programme gradually filtering out and its revamped data and voice services driving earnings higher. When you factor in Vodafone’s surging intensifying popularity in lucrative Asian, African and Middle Eastern destinations, too, I believe the firm is in great shape to deliver spectacular long-term returns.

LondonMetric Property

Thanks to the effects of an improving British economy, I believe that real estate investment trust (or REIT) LondonMetric Property (LSE: LMP) should remain a favourite for those seeking top-drawer dividends. The capital-based business advised this week that gross rental income advanced 10% during April-September, to £31.7m, although falling profits from joint ventures and escalating finance costs pushed pre-tax profit 9% lower to £64.3m.

LondonMetric remains embarked on a busy restructuring drive to boost the quality of its real estate, enhancing the desirability of its properties, the development opportunities therein, and the possibility of valuation uplifts. Indeed, LondonMetric also purchased a 356,000 square foot distribution warehouse development in Warrington this week at a cost of £30m as part of this goal.

Earnings at LondonMetric are expected to charge 14% higher in the period concluding March 2016, shoving the dividend to 7.2p per share from the 7p reward offered in each of the past four years. And predictions of an extra 12% bottom-line bump in fiscal 2017 is anticipated to improve the dividend to 7.5p. Consequently LondonMetric sports gargantuan yields of 4.3% 2016 and 4.5% for 2017.

The post Why ARM Holdings plc, Vodafone Group plc & Londonmetric Property PLC Are Prestige Dividend Picks! appeared first on The Twelfth Magpie.

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• UK REITs: a once-in-a-generation passive income opportunity

Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended ARM Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Real estate investment trusts provide a viable alternative. REITs give investors access to regular income streams, diversification and long-term capital appreciation. Here are five of the best REITs on the market today. 

eCommerce

Londonmetric Property (LSE: LMP) is a great play on the commercial property sector but it’s also a play on the online retail market as the company has re-aligned itself over the past year or so.

Management has changed the company’s property portfolio so that it’s now focused on eCommerce through retail-led distribution assets. These assets include the 1m sq ft pre-let distribution warehouse in Islip, and the 690,000 sq ft pre-let distribution warehouse in Warrington. Londonmetric currently offers a dividend yield of 4.4% and trades at a slight premium to net asset value, which stands at 129p per share. 

Healthcare facilities

Primary Health Properties (LSE: PHP) is another play on the non-residential sector. Primary Health, as its name suggests, is the UK’s leading investor in modern primary healthcare facilities. This is a long-term, defensive business and the group’s portfolio has a 99.7% occupancy rate with an average unexpired lease term of 16 years. Primary Health offers a dividend of 5.2% with a NAV of 308p per share. 

That being said, Primary Health’s dividend is not yet covered fully by earnings per share at present, although management is working towards full cover. 

London property 

Shaftesbury (LSE: SHB) is, without a doubt, a play on London’s buoyant property market. The company owns 14 acres of land in the heart of the West End and comprises some 580 shops, restaurants, cafes and bars. Unfortunately, this kind of premium exposure doesn’t come cheap. Shaftesbury currently trades at a premium of 33% to its NAV and only supports a yield of 1.6% at current levels. 

Great Portland Estates (LSE: GPOR) is another central London property investment and development company. However, unlike Shaftesbury, the company only trades at a 20% premium to NAV but Portland’s yield is a disappointing 1.1%.

Nevertheless, Portland’s prime property portfolio, as well as the group’s strong balance sheet are two qualities that are worth paying for. At the end of September 2014 the company had a net debt to property value of 22%. 

And finally, you can’t go wrong with one of the biggest REIT’s in the UK, British Land (LSE: BLND). 

British Land has exposure to the London property market as well as other developments outside the capital. The group currently supports a dividend yield of 3.3% and reported a NAV of 769p per share at the end of the first half of last year.

But while British Land is trading at a slight premium to NAV, it has a strong pipeline of projects under development, including a 40-acre site at Canada Water and 80,000 sq ft refurbishment opportunity at 338 Euston Road, Regent’s Place. So, there’s plenty of potential for British Land’s NAV to receive a boost from new projects over time.

The post Build A Strong Portfolio With 5 Top Quality REITs: Londonmetric Property PLC, Great Portland Estates PLC, Shaftesbury plc, Primary Health Properties PLC & British Land Company PLC appeared first on The Twelfth Magpie.

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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.