The Motley Fool

2 FTSE 250 property shares I’d buy in the stock market crash

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Home key with house keyring with calculator.
Image source: Getty Images

A real estate investment trust (REIT) might not seem attractive in the current stock market crash. Especially FTSE 250 member LondonMetric Property (LSE: LMP) which is big in retail properties, now that sector has been hammered. The shares did crash heavily early in the year, in line with the mid-cap index. But after a strong recovery, we’re looking at a year-to-date fall of only 7%.

We had an update from LondonMetric on Thursday, describing some acquisitions and disposals. The firm has sold four retail properties, including two M&S Food stores, for a total of £22.2m. Against that, it’s spent £10.8m buying three convenience service stations. With the bricks-and-mortar retail industry under pressure, I think that could turn out to be a canny move. The latest moves come on top of several acquisitions and disposals in recent months, and I think LondonMetric is making the most of opportunities thrown up by the stock market crash.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

The disposals have realised a £4.1m profit on cost, for an ungeared internal rate of return of 11% per year. That sounds like good investment management to me. The newly acquired service stations should provide a net initial yield of 4.7%, rising to 5.2% over five years. They’re let to BP for another 16 years, and LondonMetric says their “vacant possession value is materially above the purchase price“.

LondonMetric has been paying nicely progressive dividends for years, and forecasts suggest more of the same. We’re looking at forward yields of close to 4%. I like investment trusts, I like REITS, and if you fancy a property investment, I rate LondonMetric as an attractive buy.

Stock market crash loser

Shares in FTSE 250 housebuilder Countryside Properties (LSE: CSP) have been doing less well in 2020. The shares were storming ahead in the first couple of months of the year. But the stock market crash sent them spiralling downwards. As I write, the price is down 27% year-to-date. And it’s fallen 4.5% on the day, after the release of a full-year trading update.

Total completions for the year are down, to 4,053 homes from 5,733 homes in 2019. And the average selling price has dropped a little, from £367,000 to £364,000. But looking forward, the company is enjoying a boost to its order book, up 17% to £1.4bn.

The balance sheet was a problem earlier in the stock market crash, which Countryside addressed with a new share issue in July. It placed 74.6m new shares, raising £250m. The result is net cash at 30 September of £98.2m, from £73.4m a year previously. The firm got the share placing done without problems, suggesting to me that institutional investors are bullish over the long-term prospects for the housebuilding industry. I am too.

The dividend has been suspended in this tough year, in which analysts expect earnings to fall heavily. But a partial rebound on the cards for 2021 would put Countryside Properties shares on a price-to-earnings multiple of around 16.5. I expect that to drop significantly in 2022. I rate Countryside Properties a buy, along with the sector as a whole.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended LondonMetric Property PLC. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.