Fund manager Alan Custis believes British Land represents very good medium term value with a strong balance sheet and a good spread of property and segments.
He says: “We’ve been underweight in real estate for years and years. With the fall we’ve seen in the market and share price relative to the underlying fall in real estate values, we think now is the right time to be starting to build a position.
“It is somewhat contrarian if you look at the outflows you’re still seeing on property funds where there still seems to be a queue of people trying to get out of them but I always think you can make money when you do something oppositie to the mass market and the flow of investments.”
Custis says he is barbelling this and other cyclical plays with other more defensive stocks to balance the portfolio.
He says: “You need to have your foot in the cyclical camp because on days when the market goes up 2, 3,4 per cent you need to have those stocks that have the capability of going up 10, 12 per cent. At the same time, we’ve seen so far this week a fairly subdued market and it seems to be very rotational daily in terms of stocks hit so you need to look through the daily noise.
Custis remains quite positive on the housing sector and believes there are signs of the beginning of green shoots in the market.
He says: “The mortgage data has picked up for three consecutive months, mortgage availability is getting better, I think there is a pent up demand for people to move.
“It’s taking the advantage of the volatility in the market by buying reasonably priced consumer staple stocks and oportunistically buying into situations like Wolseley, where we can see 100 per cent upside.”