M&G expects growth


There are still reasons to be positive about business property in London, one leading fund manager has said.

John Cartwright, head of retail institutional funds at M&G, said a mixture of low unemployment and stable rental growth had placed the economy in a better position than before.

Speaking to Citywire he said: "Overall, this evidence suggests strongly to us that, whilst not without risks, the economic outlook is far healthier now than in the early 1990s, and hence much more supportive to the commercial property market."

He went on to question the accuracy of Investment Property Databank (IPD) figures, which he believed were distorted because not all funds represented have moved to fortnightly pricing.

He said yields were more likely to be between 5.75 and six per cent, rather than the 5.5 per cent as stated by the IPD.

"Our understanding is that a similar pattern is evident also in competing direct property funds," he commented.

City offices remain an important part of commercial property portfolios – they are also popular with companies looking for a dynamic central location.

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