How to invest in property and infrastructure for a reliable income

Income investors were hit hard as the coronavirus crisis unfolded and companies slashed dividends.

Meanwhile, the commercial property sector faced a double whammy, as both shops and offices bore the brunt of lockdown and saw their value and rental income hit.

However, away from the traditional commercial property world there is still sustainable income to be had for investors, argues Mark Brennan, who runs Foresight’s Sustainable Real Estate Securities Fund and UK Infrastructure Fund.

He says that a common theme that runs across the two strategies is targeting attractive cash flows that can stand up over the long term.

The property fund invests in real estate investment trust shares and backs areas such as logistics, including warehousing, health care, and even large data centres – with many of its investments benefitting from the shift to digital and rise of online shopping and services.

It has also invested in some more traditional commercial property firms, including self storage firms Big Yellow and Safestore and supermarket stores.

Meanwhile, the infrastructure fund invests in renewable energy, including wind and solar, and core infrastructure, such as transport, hospitals, schools, which have a high level of government support either through subsidies or long-term contractual agreements.

Mark argues that these areas are well positioned to keep paying dividends.

On this episode of the Investing Show, he joins Simon Lambert and Richard Hunter to discuss how he invests for reliable income and where he sees opportunities in property and infrastructure – and why some Reits can offer the chance to catch the same tailwinds propelling the big US tech firms to lofty heights.