Commercial Property Offers Attractive Yields
It is suggested that investment in commercial properties is the best and safe way and it does offer savers an alternative source of income in the form of returns. Shops, offices, warehouses and factories are some of the examples of commercial property.
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The market still has a long way to go to recover from the falls of 2008 and 2009 in the economy; however, the commercial property does offer savers an alternative source of income. Commercial economy includes shops, offices, warehouses and factories which were one of the few bright sectors for investors till last year, returning an average of 8.1 per cent, according to industry analyst IPD. George Shaw who manages Ignis UK Property said that it is one of the ‘purest’ ways to tap into these sorts of returns.
Mr. Shaw forecasts that for the next three years, an average annual return of just over seven per cent and with most of this coming from rental income. However as the market is far from uniform across Britain, Mr. Shaw focuses on the regions and sectors of the economy that appear most resilient to the downturn. As a result, the fund has a bias towards central London and the South-East and is also overweight in supermarkets. In contrast, only about five per cent of the fund is invested in properties in the Midlands and Wales.
Over these figures Mr. Shaw said that they have been avoiding areas that look more susceptible to Government spending cuts. They’re trying to provide a stable income for investors and avoid the worst of the shocks by the markets. Moreover, a core part of what they do is keeping focused on managing the income, on lease renewals and on negotiations with tenants. Their strategy is to have a diversified tenant base. There will be failures in this economic climate, but it is how you manage them that counts and is more important. It’s a time to buy your own property. If you don’t have enough cash then don’t hesitate just visit us online and borrow home loan from us, we are also help to borrow loans for people with bad credit history
The fund holds only properties themselves and cash, whereas some rivals will also invest in the shares of property companies or real estate investment trusts. At this time, the fund is paying an income of almost 3.5 per cent. According to Ben Willis, head of research at investment adviser Whitechurch Securities in Bristol, commercial property is still offering attractive yields compared with gilts. Moreover, the fund has performed well against its peers, and in a sector where size can matter, it is big enough to be able to purchase top-end properties and developments. However, the problems of leases expiring are managed over time carefully.
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