Commercial property may have enjoyed a stellar three years but fund managers warn returns are likely to be more muted in the coming months as the effects of economic pressures bear down on the market. The sector has enjoyed double-digit growth, driven by a combination of income, capital growth and strong demand from overseas buyers who were attracted to key markets, such as central London. But the prospect of interest rate rises and the forthcoming EU referendum have forced people to put their investment plans on hold, said Marcus Langlands Pearse, co-manager of the Henderson UK Property fund.
Markets under pressure
‘The sector under most pressure is likely to be the central London market, until Brexit is determined,’ said Langlands Pearse. ‘Many overseas buyers have suspended further investment, particularly in the larger lot sizes.’
The retail sector is undergoing structural change due to the growth of internet shopping and convenience grocery shopping. So Langlands Pearse has been focusing on other areas of the market…
[Source: New Model Adviser - Author: Rob Griffin - March 8, 2016]