The majority of IFAs believe commercial property prices will rise over the next 12 months but many are not confident enough about the sector to recommend it to clients, according to Reita.In its latest quarterly research, the Real Estate Investment Trust Association found almost three quarters of IFAs polled expect commercial property prices to rise in 2010, which it says is broadly in line with expectations within the property investment industry.
However, despite the strong resurgence of interest in property funds over the last few months, 60% of IFAs remain uncertain about advising clients on how to choose between different property sub-sectors.Patrick Sumner, chair of Reita, said: “The dilemma facing advisers stems from a feeling the sector is overbought in view of uncertainty about the global economy.“In the UK there is in addition a general election looming, with the possibility of a hung parliament. So while the dividend yield offered by some REITs remains attractive, the perceived risks are clearly a deterrent."
Meanwhile, survey respondent, Martin Bamford, managing director at Informed Choice Chartered Financial Planners, said: “Commercial property, particularly in the UK, is one of the more attractive asset classes in the current climate.“Yields are looking very competitive for income seekers. Investors who are able to view property as a longer term investment, within a diversified portfolio, should consider now to be an opportunity to increase their allocation, as long as they are investing with their eyes wide open.”
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