In Moneyweek, Rupert Hargreaves looks at the prospects for Tritax Eurobox.

REITs are companies that own or produce income from real estate, and you can invest in them. Recently, many people have been selling their investments in them, mainly because of rising interest rates. In simple words, when interest rates go up, it becomes more expensive to borrow money to buy properties.

Why the Panic? There was a time when it was super cheap to borrow money, and people would buy property, expecting the prices to always go up. But now, because of higher interest rates, that’s changing. Property prices are adjusting, and investors are looking more at value rather than just rental income.

The Impact REITs have been affected quite a bit because people are unsure about the future. This has resulted in many selling their shares. But this might be a golden chance for investors who think long-term.

UK vs. Europe in Property There’s a significant difference between the UK and European property markets, especially in how rents are set. In Europe, rents are linked to indexes (meaning they can go up or down based on some standard numbers), whereas in the UK, they mostly only go up to a certain limit.

Enter Tritax EuroBox This company is interesting because:

• It manages a lot of properties across Europe.
• It owns 25 properties mainly used for logistics (think warehouses for online shopping).
• Most of its income is from these index-linked contracts in Europe.

Online shopping is on the rise, and so the need for warehouses in Europe is expected to grow. This company’s CEO thinks this growth has a long way to go.

Why Invest in Tritax EuroBox? Here are some simple reasons:

• The company’s properties are worth more than what the stock market currently values them.
• They give an 8% dividend yield (that’s like getting 8% back on your investment every year through dividends).
• They’ve already adjusted their assets’ value considering the higher interest rates.
• Their rental contracts, linked to indexes, are an added advantage.

Also, the company isn’t in any immediate financial trouble and doesn’t have significant debt repayments until 2025.

The Bottom Line Investing in Tritax EuroBox could be a safe bet. They’re undervalued at the moment, and their focus on the growing logistics market in Europe could mean steady growth. Plus, their dividend yield is quite handsome. It may not make you super-rich super-fast, but if you’re looking for a steady income and a relatively safer investment, this might be it!