Returns from UK commercial property generally should be in the region of 8 to 9.5 per cent, which compares favourably with the expectations of many of the big investment houses that equities will return around 7 per cent. Returns on Government bonds are around 5 per cent. Demand is likely to continue to be high, particularly from the elderly who are looking for income. Here, property bonds are an ideal investment because of the 5 per cent tax-free withdrawals, which look attractive at current interest rates. Another reason for optimism is that pension funds and institutions, which have been selling equities, have been attracted by the high income yields on offer from commercial property. The expansion of self-invested personal pensions and the buy-to-let market are also likely to make property popular with private investors. Rental growth has picked up again, too. Property bonds as a whole have shown 10-year returns, after expenses and tax, of over 7 per cent while some of the bigger well-managed ones have shown returns of over 9 per cent. It is important to choose big funds in order to have a wide spread of underlying assets. It is also important not to look at shortterm returns as differences in valuations by different valuers can be substantial although, over the longer term, these valuations usually even out. The property bonds I recommend are those issued by Prudential, Norwich Union, Scottish Widows and Legal & General, all of which have excellent past records and whose funds are big enough to continue to give steady returns.