Commercial Property Makes a Comeback

Investors have enjoyed a better time in this asset class in 2021, but experts say they need to be selective about where they put their money

Cherry Reynard 14 September, 2021 | 11:59AM
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Commuters in London

On September 6, the London Underground had its busiest morning in 18 months. Congestion levels were almost back to pre-Covid highs. This suggests the death of the office market may have been greatly exaggerated, even in this brave new era of agile working. Investors in commercial property have started to take note.

2020 was a grim year for commercial real estate. Uncertainty over the future of office working, the ongoing gloom in the high street, delayed rents and sliding capital values forced open-ended property funds to shut up shop (again). Funds in the IA Property Other sector dropped by an average of 7.2% over the year, while UK Commercial property investment trusts fell 13% (source: Trustnet). The only bright spots were logistics and certain industrial property, which benefited from the adoption of online shopping.

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About Author

Cherry Reynard

Cherry Reynard  is a financial journalist writing for Morningstar.co.uk.