Potts: ‘Think long-term’

Posted on Posted in INDUSTRY NEWS

Commercial property should be considered a long-term investment, Henk Potts, investment analyst, has advised.

Mr Potts from Barclays, told City AM commercial propertyperforms stronger against other investment opportunities when it is considered over a longer term.

"Overall, we would still adopt a cautious outlook on UK real estate, whether exposure is direct or through quoted real estate investment trust," he said.

According to the Investment Property Databank, the last six months until February 2008 saw commercial property values drop 12.3 per cent.

However, as property yields are rising and ten-year-gilts are falling, it means property yields are now greater.

Commercial property remains sensitive to the economic background, noted Mr Potts. He explained the relationship between the City and its commercial property "is not encouraging".

He concluded: "So, while the short-term outlook for UK commercial property is poor, it does still have a useful role to play, particularly for long-term investors seeking income as part of a diversified investment strategy."

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