Money News
With the Chancellor having put REITs (Real Investment Trusts) on the back burner (until 2006) in his Budget, investors could be forgiven for thinking that commercial property investment by private investors had fallen off the radar too. Not so, given that Friday saw shares in the largest listed UK Property Trust begin trading on the stockmarket.
Guernsey registered F&C Commercial Property Trust Limited invests in a portfolio of 30 UK commercial properties - including retail business parks, shopping centres, offices and industrial properties - managed by F&C Property Asset Management, the property arm of F&C Asset Management plc.
Gordon Humphries, director, investment trust business development at F&C, makes the point that demand for this investment vehicle has been exceptionally strong following the success of two previous closed-end listed property trusts. "Investors are focused on income generating investments at the moment, so they have been attracted by the combination of a decent yield, asset diversification and high quality tenants on the underlying portfolio," he notes.
Meanwhile, Paul Herrington, managing director of F&C Property Asset Management, argues that returns on commercial property have been strong yet it is an area where private investors have little exposure. Whilst Herrington thinks the 18.3% return in 2004 was an aberration, he does anticipate market returns of around 10% during 2005 and 7%-9% over the longer term.
21 April 2005 © Moneyextra.com
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