Kepler Partners' Alan Ray: This could be the right time to look again at property trusts

'Positive momentum' for share prices

Back in 2022, the stock market correctly identified that, with interest rates on the rise, commercial property was likely to suffer falls in value.

Property, which is of course an asset class with a yield, has a long-established relationship with interest rates and share prices of real estate investment trusts (REITs) fell quite rapidly in anticipation of this relationship. In the two years following, the asset values for REITs have fallen by 20% or more, which, straightforwardly enough says the stock market was right. Getting into the weeds a little bit, one might argue that the stock market has overshot, leaving REITs on unjustifiable discounts, but the fundamental judgement the market made was accurate. In the last few week...