Architas has switched the property allocation in its Diversified Real Assets fund from student accommodation to healthcare over Brexit concerns.
The firm has removed the Empiric Student Property fund from its portfolio due to its plans to branch out into owning townhouses for students, which it expects to be more sensitive to the health of the mainstream residential property market.
It has upped its exposure to the Assura Group, a Reit holding property in the healthcare sector, particularly GP surgeries.
Architas senior investment manager Solomon Nevins (pictured) said: ‘Healthcare property is attractive for long-term structural demand for purpose-built modern primary care facilities that should support asset values and growth opportunities, and a tenant that has its rent reimbursed by the government.’
Explaining the decision to reduce student accommodation exposure, he added: ‘The Brexit process is potentially going to have some impact on student numbers from the European Union to the UK.
‘EU students could go from paying EU fees to full international fees, making studying in the UK less appealing.’
But the firm has retained its holding in the GCP Student Living fund due to its more focused approach on purpose built student accommodation.
Nevins added: ‘What you want to achieve with specialist property is longer leases and different credit risk. In general you are buying long duration assets with some kind of inflation protection.’
Nevins co-manages the fund alongside Citywire A-rated Sheldon MacDonald. Over the last three years it has returned 8.3% over the last year versus a peer return of 8.8%.