UK - Commercial property is continuing to outperform all other asset classes, research shows.
Property performance measurement firm IPD’s monthly index – based on 2943 properties worth a combined £23bn – showed returns had increased during the past year while other asset classes had floundered.
IPD said returns had risen from 10% for the year to August 2003 to 16.1% for the year to July 2004 and for the month of July the total return was 1.4%, compared with 1.5% for equities and 0.4% for gilts.
An IPD spokesman said: “UK property performance continues to improve, delivering solid returns that have outperformed other asset classes over one, three, six and 12 months, as well as over the last three, five and 10 years.
“Meanwhile, equity returns have been much more volatile, ranging from 4.6% for the 12 months to August 2003, to 31.9% for the year to February 2004, and back to 10.7% for the 12 months to July 2004.”
The report also found office returns during July equalled those achieved by the industrial sector for the first time in three years. Both industrials and offices delivered total returns of 1.1% for the month and capital values rose 0.5% due to a fall in yields.
“Retail returns remained strong in July, at 1.6%, leaving three-month returns on retails 5.9% at the end of July, up from 3.9% at the beginning of the year,” IPD said. “Over 12 months the sector has achieved total returns of 19.8%, thanks mainly to a significant decline in yields.”
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