View more on these topics

Julian Gibbs

Over the next five years, most analysts expect commercial property to show

gross returns in excess of 10 per cent a year. This is made up of yields of

around 7 per cent plus rental growth of 3 to 4 per centa year. This should

equate to a return of around 7.5 per cent a year net of charges and taxes

for a well managed property bond or property unit trust.

This return should be about the same as that on the best with-profits

bonds but with slightly lower risk.

Some sectors of the property market are weak. Much of the retail sector

should be avoided but, on the other hand, office rents in East London and

some regional centres should continue to rise by more than inflation.

Retail warehousing is another attractive investment in some areas.

Over the past five years, property bonds have outperformed most other

investment bonds. They have risen by 7.5 per cent a year on average whereas

UK all companies funds have risen by 7.2 per cent a year, balanced managed

by 5.8 per cent and global equities by 4.4 per cent.

While equities over the longer term should outperform commercial property,

I believe the outlook for equities, except for those managed by the top

managers, is cloudy over the next three to five years. Commercial property

bonds or unit trusts are a safer investment for the elderly and for

risk-averse investors.

The property bonds I like best are issued by Scottish Widows, Allied

Dunbar and Norwich Union, while my favourite property unit trusts are from

Norwich Union and Portfolio.

Portfolio, in particular, has shown an excellent performance over the last

two years and I believe that this outperformance is likely to continue.


Test your knowledge online

Test your knowledge online with Money Marketing&#39s CPD questions.Specialist financial publisher Taxbriefs has drawn up multiple-choicequestions based on articles in this week&#39s issue. For further details andthis week&#39s questions – see page 53. DOCB: SRCE: Money Marketing PDAT: 300801 SCTN: News PGNO: 3 RANK: HDLN: Aggressive US fund from Solus to be run by Phoenix […]

Annuity Bureau calls for rule changes

The Annuity Bureau is calling for new legislation to forceinvestment-linked annuity providers to allow transfers from one provider toanother to provide a lifeline to annuitants locked into poor-performingfunds. The specialist IFA is arguing for the change in light of the poordeal Equitable Life annuitants receive and also for policyholders optingfor riskier investment-linked annuity products.

JP Morgan Fleming plans October launch for guaranteed fund of funds

JP Morgan Fleming has confirmed it is introducing a guaranteedfund-of-funds product in October, investing in a selection of its own funds. The product, revealed in Money Marketing last month, will aim to achievegrowth over five years while providing a 100 per cent capital guarantee. The closed-end fund will invest in a basket of JPMF funds, […]

Threat to R&SA life arm sale as GAR liabilities top £1bn

Royal & Sun Alliance&#39s guaranteed annuity liabilities have rocketed tomore than £1.5bn, putting it in the same league as Equitable Life andjeopardising a potential sale of its life business. Money Marketing can rev-eal that its 2000 Treasury returns show reservesfor guaranteed annuity options rose on the back of R&SA&#39s Sun Alliance &London £10bn fund. Its […]


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