Where are your properties?
Our largest allocation is in the South East, but we are broadly spread across the Midlands, the North West and the North East, too. We are happy to travel around the country, as we are more interested in the “micro” location of real estate.
For example, if a town in the North East has a dense population and does not have strong food store competition, that is a great place for an Aldi supermarket. Or if we are looking at a budget hotel, we want an area that is easy to travel to and is nice enough that people will want to spend the night.
How worried are you about a recession in Britain?
It is always at the front of our minds, as it could affect how our tenants will perform. But a very large proportion of our tenants are in areas where spending is not discretionary, such as in supermarket foods and healthcare. We expect Aldi and Lidl to perform well, especially as many shoppers are looking for cheaper alternatives at the moment.
We also only pick tenants that look like strong businesses, with healthy balance sheets that can withstand an economic downturn if they have to.
Why have you agreed to merge with another Reit?
Our deal with Secure Income Reit gives us a very good opportunity to buy £2.3bn worth of assets on very long leases. Its properties have an average lease length of 30 years.
The deal will immediately improve cash returns: we think that we will be able to get £8.6m worth of cost savings each year. This extra cash gives us the potential to introduce even higher dividends.
What have been your best and worst investments?
On one of our earliest investments we made a return of 56pc on a property in the healthcare sector. One of our weakest was an early investment in social housing, which we sold because we felt that the regulatory environment was becoming too problematic. We still made a mid-teens percentage return, although that is the worst that we have delivered.
What would you have been if not a fund manager?
I was originally a lawyer.