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Midas spreads out property investment globally to cut risk

Multi-manager Midas Capital is diversifying its property exposure on a global basis due to concerns about the growth prospects for UK commercial property.

The fund manager, which runs the CF Midas balanced income and balanced growth funds, has bought into more exotic funds such as the Orchid Development Fund and Dawnay Day Carpathian alongside more conventional UK commercial property funds such as the Morley high income property unit trust. The Orchid Development fund invests in Bulgarian property while Dawnay Day Carpathian invests in retail property in Eastern Europe.

According to Midas, there has been an insatiable thirst for property among domestic investors over the last couple of years, but the property market in emerging Europe is not as advanced but has the scope to catch up as a convergence play.

Midas concedes there is a higher risk element to its more exotic holdings but believes it is worth it on a risk/reward basis. It also sees growth opportunities in the Japanese residential market.

Midas chief investment director Alan Borrows says: “There has been no inflation in Japan so we have been thinking laterally that it might benefit the residen- tial market. We hold a fund called Japan Opportunities Fund II, which buys residential apartment blocks yielding 8-9 per cent. Working the properties more efficiently and putting through rent increases not seen for a number of years may also lead to capital values increasing.”

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