UK Commercial Property Popular with Investors Again

As the economic situation in Great Britain and all over the world seems to be slowly easing, major British investors become active again. While some investors return on the commercial property market, others choose less risky ways of investment by putting money in expensive wines and rare coins. Despite the fact that the values of UK commercial property fell by an average of 45% since 2007, large UK investors such as Gerald Ronson, chief executive of Heron International Plc, UK property investment and development company, are putting their money in commercial property units like offices and shops because they are determined that prices can’t go anywhere but up. Moreover, the fall in commercial property values leads to a significant increase in rental yields, which grew from 4.6% in 2007 to as much as 7.9% this year. Such a high return on investment is another reason why experienced UK investors turn back to the commercial property market. According to one of the portfolio strategists at Merrill Lynch Global Wealth Management, Mr. Bill O’Neill, the fact that commercial property in Europe and in Great Britain in particular was not cared for by investors and that concerns over firms’ financing are still in place, mean that this type of investment is cheap. The latest research by Hotbed, a British network of investors, revealed that in 2009, 75% of private banks that participated in the survey approved of commercial property investment, which compares to 30% last year. The popularity of investment into commercial property is reflected in a large number of commercial property funds set up lately. For instance, the UK Strategic Income Property fund has recently been launched by BDO Stoy Hayward Investment Management in cooperation with Coba Asset Management. Meanwhile, other forms of investment for people who have either less cash or more caution, are fine wines and rare coins. For instance, Mr. Alan Brown, who currently takes the post of chief investment officer at one of world’s leading asset management companies – Schroders, invested a fortune in Bordeaux wines.

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