Insurance News Archive
Careful investing in commercial property 'still makes sense'
Investors who have over-exposed themselves to the commercial property market have experienced "terrible" losses but putting money in the sector "still makes sense", a guru asserts.
Jason Butler, a partner at Bloomsbury Financial Planning, claims these negative effects are a result of individuals placing a disproportionate amount of their money into a single asset class.
He predicts the market will recover as companies begin to earn more money and are able to pay rent, as this will reinvigorate the sector and create more demand.
"Commercial property as part of a fully diversified portfolio still makes sense and has always made sense," he states.
However, he warns it is important not to invest more into this sector than is placed in equities.
Also recommending people avoid placing substantial amounts in specialist vehicles such as residential land funds, he says these are highly speculative and contain a strong element of risk.
Recently, Francis Salway, chief executive of Land Securities, warned that the commercial property sector has recently undergone "an unprecedented period of readjustment".
27 Jan 2009
