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NU sees a small rise in commercial property

Norwich Union has seen the first rise in commercial property since December last year but says it is too soon to say if it has bottomed out.

NU’s fortnightly property fund valuations show its property investment fund has seen a small rise of 0.02 per cent although its flagship property trust fell by 0.76 per cent.

Outflows from the funds reduced significantly in the first quarter of this year and the property trust stands at £2.7bn compared with £3.2bn at the start of the year and £4.4bn last August.

NU says it sold nine properties last month for a total of £200m, with no acquisitions. It has sold one property in April and is in the process of exchanging contracts on a second property.

Morley head of retail property funds Philip Nell says income returns should be over 5 per cent a year at current prices.

Hargreaves Lansdown investment manager Ben Yearsley says: “It is interesting that the property investment fund saw a small rise in the latest valuations but the problem that all these firms face is that while outflows have fallen, getting new money into the sector is a completely different task.”

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