View more on these topics

Bonham Carter still wary over commercial property outlook

Jupiter Asset Management chief executive Edward Bonham Carter says he is still wary about the fundamentals of the UK commercial property sector.

He says despite there being more optimism in the sector, it is important to recognise that rents are still falling in a number of areas while vacancy rates are rising. He says optimism is being fuelled by foreign investors going into the sector because of a combination of the fall in sterling and the underlying property price plunging by 30 to 40 per cent.

Bonham Carter says: “You are ending up with a 50 per cent price cut which obviously is an attraction to investors.”

But he says investors should not forget the lessons of the credit crunch, where too much money went into illiquid assets such as property. He questions whether illiquid assets like commercial property should only be allowed to sit in closed-ended vehicles.

He says: “We saw how property suffered in the credit crunch. You can always buy property shares or Reits so there is plenty of choice but the problem is that managers can have a big cash drag effect in property. In rising markets, they are slow to invest money, which drags returns, and in bear markets they do not have enough cash and have to gate their funds, which is what happened.”


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm