Commercial property could be the shrewdest investment of 2013 | 24 September 2013
Commercial property could be the UK’s most shrewd investment opportunity in 2013, moneymarketing.co.uk reports.
Following on from an unsteady start to the year, many had expected it to be a number of months before the property market returned to the healthy levels it inhabited before the 2007 financial crash.
A turnaround has come much sooner than many had first expected, however, with industry analysts now claiming that the commercial property market could, in fact, not just be healthy, but one of the best opportunities currently available to prospective investors.
Compared to the trough in values reported during 2009, the sector is up by 70 per cent. Not only that, Investment Management Association property has piqued the attention of numerous investors, with the result that, in August, it was the fifth best-selling sector available, reaching net retail sales of £140 million. This total marked the highest level seen since July 2010.
Now, property fund manager at F&C UK, Guy Glover, has claimed that commercial property market forces have created a perfect storm for potential investors. Valuations are still relatively low – around 35 per cent under pre-crash levels – thus opening investment up to a much larger audience. Not only that, investors are currently searching for safe sources of income and finding it in property.
Glover told fundweb.co.uk: “At the [beginning of the year], ten-year gilts were delivering two per cent and property income return was coming through at 6.5 per cent.
“You’re looking at corporate bonds at four per cent, equities with a three per cent yield and you see commercial property is double or treble some of other asset classes and people are out there screaming for income.”
The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.
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