Get in on the ground floor with this property trust

AEW UK Long Lease Reit offers another route to income. The property firm intends to float, raising £150 million by issuing shares at 100p each. There is a targeted dividend yield of 5.5 per cent, which is expected to rise annually at least in line with inflation.

Mindful of investors’ increased interest in long-term, predictable income, AEW Long Lease Reit is focusing on properties where rental agreements are linked to inflation, leases are extremely long and the sites themselves are undervalued.

To achieve these aims, the group is looking away from mainstream property, such as office and retail, where valuations are often quite high. Instead it is looking at assets such as cinemas, gyms, car parks, nurseries and care homes, often overlooked by big property investors, yet growing relatively fast.

The Reit is run by Alex Short, who has spent more than 20 years in the property sector. She and her team are already in advanced negotiations on a number of sites and expect to have invested the flotation proceeds within nine months.

To make sure the group is diversified, Short is expected to buy 20 to 30 sites and no one

property will exceed 10 per cent of the portfolio.

Midas verdict: AEW Long Lease Reit is focused on preserving capital and delivering income, two attractive ambitions in today’s uncertain world. Applications for shares can be made via a wide range of stockbrokers, the minimum investment amount is £1,000 and the deadline is May 31. A good buy for cautious investors.