After the Tory win, the UK property market has surged back to life. Property values across the country jumped nearly 10% in the year to the end of March, and the market shows no sign of slowing down anytime soon.
So, here are five great plays on the UK’s booming property market.
East End landlord Great Portland Estates (LSE: GPOR) reported an 18% year on year surge in the value of its portfolio when it reported results earlier this week.
In the year to the end of March, the group’s net asset value per share rose 24.6% to 709p while pre-tax profit jumped by 17.4% to £45.1m.
Great Portland is one of the best ways to play London’s booming property market, but you have to be willing to pay a premium to get your hands on the company’s shares.
At present, the group is trading at a price to net asset value of 1.2, a forward P/E of 67.2 and only offers a dividend yield of 1.1%.
Best of breed
Land Securities (LSE: LAND) is the UK’s largest property group, so it makes the perfect property investment for the risk adverse investor.
And the group “blew the lights out” when it released its full-year results to the end of March this week. Pre-tax profit nearly doubled to £2.4bn. Net asset value per share rose 26% to 1,343p.
Land Securities currently trades at a 1.4% discount to its net asset value, a forward P/E of 29.9 and supports a dividend yield of 2.6%.
British Land (LSE: BLND) is the UK’s second largest property group behind Land Securities.
Just like Land Securities and Great Portland, British Land reported strong growth in the value of its property portfolio in the year to the end of March. Net asset value per share rose 21% to 829p, and pre-tax profit increased 5.4%.
British Land currently trades at a 5% premium to its net asset value per share. The company supports a dividend yield of 3.3% and trades at a forward P/E 26.7.
Shopping center owner, Hammerson (LSE: HMSO) is a great play on rising UK retail sales. In the year to the end of December, Hammerson reported an 8.1% increase in net rental income from operations and the group’s net asset value rose 11.3% to 638p per share.
Unfortunately, this means that the company does trade at a mild 6.5% premium to its net asset value, making it one of the most expensive plays on the sector.
However, Hammerson does offer an attractive dividend yield of 3.2%. The payout is set to increase at around 7% to 9% per annum for the next few years.
As a homebuilder, Barratt Developments (LSE: BDEV) is an alternative pick to the real estate investment trusts listed above.
Indeed, Barratt doesn’t enjoy the same kind of tax benefits as a REIT, although it’s still a great play on the UK’s booming property sector.
Barratt’s earnings are set to grow by around 41% this year to 43.9p per share and on that basis, the company is trading at a forward P/E of 13.2 and PEG ratio of 0.3.
Barratt currently supports a dividend yield of 4%. City analysts believe that Barratt’s earnings per share will rise a further 18% during 2016 putting the company on a 2016 P/E of 11.2.
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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.