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The Property Shares You Should Have Bought In 2018 Were A Big Surprise

Paternoster Square, home of London's Stock Exchange

If you wanted to make money buying shares in listed property companies in 2018, then you needed to avoid the big names — and in fact, most of the medium names too.

Tiny Panther Securities, with a market capitalisation of just £64M, was the best-performing UK property stock last year, according to data from Refinitiv. It provided a total return of 33%.

The top five performers include LXi REIT with a total return of 22%, U+I with a return of 17%, Conygar with a return of 11% and Secure Income REIT with a return of 8%. The latter is by far the largest company on the list, with a market capitalisation of £1.2B.

Spotting trends that link top performing shares can often be an exercise in putting a narrative on to events that are essentially random, but there are some themes: Panther, Conygar and U+I all focus on development to varying degrees, and LXi and Secure Income both buy properties with very long leases. None has a big focus on London.

It is much easier to spot the link between most of the worst-performing shares of 2018: Intu with a total return of -52%, Capital & Regional at -49%, Hammerson at -36%, NewRiver REIT at -31% and Capital & Counties at -27%. The first four are all retail specialists and so were hit by the turmoil among retailers. CapCo is the odd one out, but a big slug of its business is in the stalling London prime residential sector.

On an averaged basis you would have been better off putting your money somewhere other than property shares in 2018: The sector as a whole produced a total return of -11%.

The big guns were all fairly mediocre to poor. In spite of the strong performance of logistics, Segro’s total return was just 3%. London specialists Great Portland Estates and Derwent London returned -2% and -4%, respectively. For the big diversified firms, Landsec and British Land, the figures were -16% and -19%.