You decide: Commercial property v fixed income

PA PORTFOLIO

clock • 4 min read

As outflows from fixed income hit record levels, Rebecca Jones asks three fund managers whether UK commercial property could work as a substitute.

James de Bunsen, Multi-manager, Henderson Commercial property offers an attractive yield and is fairly stable. The headline yield on the IPD index is around 6% but there is a big polarisation between prime property and sub-prime property. Prime property tends to be Central London (West End offices, etc.) where a lot of foreign buyers have bought up assets and pushed the yield down to 3% and below. However, retail units in other regions and provinces are still yielding 8% to 10%. The Henderson UK Property fund does not chase yields by buying sub-prime assets. Even so, what the manage...

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