0 minutes Less than a minute read
Investment fund, Aviva has told its investors the poor performance of commercial property will not damage their investments as it remains resilient in the long term.
Most competitors have reduced their property liabilities and some funds have found themselves going under because of the current difficulties.
Scott Brown, head of annuities at Norwich Union explained that the company has operated with large exposure of this sort for 15 -20 years.
"We get excellent yields for these assets – there is a very low risk and we have not had any defaults in the past five years," he said.
Currently the firm has two-thirds of its liability (more than £10 billion) backed by commercial property.
Other funds have taken a different route. Prudential only has five per cent of its risk in the same market, Legal & General and Standard Life both stopped using the sector to back their annuities some years ago.
Click here to find out more about available office space in London