London is Europe's most exciting property market, if you believe Mayfair's estate agents. But by far the top-performing real estate investment trust (Reit) in Europe is Unibail-Rodamco, a $13bn (£10.4bn) French company with no assets in Britain. With dividends reinvested, the return on its shares has beaten Land Securities - Britain's largest Reit - by about eight times since the turn of the millennium.
- Strong track record
- Ability to grow dividends
- Well-diversified portfolio
- Substantial development pipeline
- Exposure to Spain
- Proxy for eurozone risk
The reasons for this include one big structural advantage that should ensure ongoing outperformance: Unibail is more profitable than any of the big UK Reits, and therefore pays bigger dividends. That's largely because it can borrow more cheaply - with direct access to the bond markets, the group paid just 3.6 per cent on its €9.7bn debt pile last year. Lower administration costs - the topical one being executive pay - have also helped ensure that as much rental income as possible flows through to shareholders.