Commercial Property Remains a Solid Investment

Property investors have been told that location should not be their primary reason for making a purchase. Instead, buyers have been told to focus on income, illiquidity and transaction costs, the Financial Times Advisor reports....

Property investors have been told that location should not be their primary reason for making a purchase. Instead, buyers have been told to focus on income, illiquidity and transaction costs, the Financial Times Advisor reports.

This is according to Don Jordison, managing director of Threadneedle Property Investments. Speaking at the Morningstar Investment Conference, he emphasised his view that stock selection is the most important factor in commercial property investing.

"Property is not about location, location, location it is about income, illiquidity and high transaction costs. You have to get your stock selection right and that is where you have to dedicate your resources," Mr Jordison said.

He noted that commercial property had experienced a "complete rollercoaster" over the past few years, with values falling by as much as 44 per cent since the peaks of 2007. Despite this, he said that commercial property remains a good investment as "it is stable, it is reliable and it is zero correlated".

In particular, Mr Jordison recommended that investors look at the opportunities which are likely to present themselves within the UK property market, with its robust legal system ensuring the market remains transparent and safe.

- Friday 13 May 2011

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