Are the best years behind us?
UK commercial property has had a good run; over the one, three and five years to December 2017 the asset class has delivered 8-11%p.a. total returns for investors, significantly outpacing UK bonds and closely matching the returns from UK equities. Performance has been reasonably buoyant in the first six months of 2018 also; while growth in the broader economy has been stunted by weather related issues, continued momentum in the UK real estate market has produced c.4% total returns for H1-2018 versus -0.3% and 1.1% for long-dated UK Gilts and UK equities respectively. Even so, this year has started off more challenging than the last; and the recent changes in market conditions will make it difficult to emulate last year’s success.
Click the PDF link above to find out whether the case for investing in UK real estate is still sound.