Geopolitics, tariffs, inflation, and interest rates continue to dominate investor attention. However, Marcus Phayre-Mudge, fund manager of TR Property Investment Trust, argues that market sentiment is not fully reflecting the strength of underlying property fundamentals.
Speaking with Jonathan Davis on the Money Makers Investment Trusts podcast, Marcus discussed why he believes the underlying fundamentals of many listed property companies remain stronger than current valuations suggest. While market volatility has weighed on sentiment, occupier demand across many sectors continues to hold up well. At the same time, years of underdevelopment and rising construction costs have constrained new supply, creating favourable conditions for landlords with high-quality assets.
Looking beyond the macro backdrop
Marcus highlights continued tenant demand for high-quality real estate across a range of sectors, noting that customers are still competing for prime space while years of underdevelopment have constrained supply.
The sectors driving performance
European shopping centres have benefited from resilient consumer spending and limited new competition, while logistics assets continue to enjoy structural demand drivers. Marcus also points to selected residential markets, including Germany and Poland, where long-term supply shortages remain supportive. Across these sectors, many companies are reporting healthy rental growth and resilient earnings despite an uncertain macroeconomic environment.
Consolidation reshaping the sector
Marcus and Jonathan also explore the continuing wave of M&A activity across listed real estate. As investors increasingly favour larger, more liquid companies, smaller property businesses are facing pressure to achieve greater scale. This is driving consolidation across the sector and creating opportunities for shareholders as companies seek to unlock value through mergers and acquisitions.
Why valuations continue to attract attention
Despite improving fundamentals, many listed property companies continue to trade at substantial discounts. Marcus argues that part of this reflects lingering concerns around interest rates and refinancing costs, while also acknowledging that property valuations are often imperfect measures of value. However, in Marcus’ opinion, the backdrop could improve quickly if macroeconomic uncertainty begins to ease:
“There is plenty of debt available, which is another reason for us to feel positive that, should geopolitical risk reduce, we will see that transmission mechanism back into capital value growth manifest itself quite quickly.“
Listen to Marcus’s full conversation with Jonathan Davis on the latest episode of the Money Makers Investment Trusts podcast.
Listen to the full episode here
Your capital is at risk. The value of your investments can go down as well as up and you may get back less than you originally put in. Approved by Columbia Threadneedle Management Limited on 29/06/2026.
