With the UK property market roaring back to life, it could be time to start investing in property again. For most investors, the best way to play this trend is via a well-diversified Real Estate Investment Trust, or REIT for short.
Biggest is best 
The UK’s largest REIT is Land Securities (LSE: LAND). Land Securities holds the largest portfolio of commercial property in the UK and the company is also one of the country’s largest property developers.Â
As a result, Land Securities is probably one of the best plays on the UK’s recovering property, due to its size and diversification, two extremely attractive qualities. Of course, most investors will be attracted to REITs for their dividend yields.
At present, Land Securities supports a dividend yield of 2.9%, the payout is covered 1.3 times by earnings.
Some readers may think that a payout cover of 1.3 times seems low, but REITs have to pay out 90% of their property rental income in dividends. So, there is no need to worry. Land Securities’ dividend yield is set to hit 3% next year, then 3.2% during 2016.
Cautious stanceÂ
British Land (LSE: BLND) is the second largest REIT in the UK and may be more attractive for income investors. Indeed, British Land currently supports a dividend yield of 3.8% and this payout is set to hit 3.9% next year.
Further, British Land’s management has recently taken on a more cautious stance. The company became a net seller of assets last year, as management sought to de-risk the group’s property portfolio. Hopefully, this cautious stance will ensure that British Land’s dividend payout remains in place if the property market goes into reverse.Â
Stay away
But while British Land and Land Securities look attractive due to their size and diversification, investors should be cautious around Intu (LSE: INTU) and Great Portland Estates (LSE: GPOR).
Intu supports an attractive dividend yield of 4.7%, although this is set to fall to 4.3% next year. The company owns several of the UK’s top 25 shopping centres and is suffering from a move away from brick-and-mortar retailing. For example, like-for-like net rental income fell 1.9% during 2013.
Additionally, Intu is saddled with a high level of debt. Actually, the company is the only REIT in this article with a higher loan-to-value than it had pre-credit crunch.
ExpensiveÂ
Lastly, Great Portland Estates, which over the past five years has seen its share price rise more than 190%. However, Great Portland’s current dividend yield of 1.4% is hardly attractive.
What’s more, the company’s net asset value per share stood at around 450p at the end of the first quarter. This implies that at present levels, Great Portland is trading at a 43% premium to the value of its property. For some, Great Portland’s low dividend yield and high premium to asset value may be concerning.