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National Employment Savings Trust moves into commercial property market | 09 July 2013

The National Employment Savings Trust (NEST) has announced it is to invest a fifth of savers’ funds into the UK’s commercial property market, ifaonline.co.uk reports.

In a bid to move away from bonds in the low interest rate environment, the state-sponsored NEST has pledged its support to the commercial property market. Now, it has announced that around a fifth of all savers’ funds will be invested in commercial property with a view to reaching its ambitious targets of controlling £150 billion of assets by 2030.

The commercial property market has historically been seen as a higher risk investment than fixed income, although the move looks to have underlined confidence in the market.

Whilst UK commercial real estate fell in value by approximately 40 per cent during the financial crisis, NEST’s announcement comes amid reports that the asset class has “inflation-linked qualities”. This means that, in most cases, rents have been rising in line with prices.

Of NEST’s investment, some 70 per cent is thought to be directly into property, whilst the remaining 30 per cent will go towards shares of property companies from the UK and all over the world.

Commenting on the move, chief investment officer at NEST, Mark Fawcett, told ft.com: “It has good diversification away from equity risk qualities.”

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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