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Opening the door to more
storeys in your portfolio
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Commercial property can offer good
returns
and stability
Commercial property funds have now been added to the choice available to Individual Savings Account (ISA) investors.
They enable investors to share the ownership of shopping centres, office blocks and factories. Property funds can either purchase the buildings themselves or shares in property companies.
Typically, when a commercial property fund buys a property, it tends to have a contract over 25 years, with known rent rises. This provides a very long-term, stable, increasing income with the potential for capital growth as the value of the property increases.
Commercial property funds could also help balance the risk in a portfolio because they are not correlated with bonds and equities.
Investors will also be able to invest in Real Estate Investment Trusts (REITS) from January 2007. These are tax-efficient property funds quoted on the Stock Exchange and have been successful in the US, Japan and Australia.
The proportion of money you might consider investing in commercial property will depend on your age and attitude to risk. A lowly correlated investment with additional steady yield could be attractive but it predominantly appeals to those who require the income stream more immediately, so is most likely to appeal to retired or retiring investors.
To discuss the options available to your situation,
please email or contact us for further information.
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The value of your investment can go down as well as up and you may not get back the full amount invested. Levels and bases of, and reliefs from, taxation are subject to change. Quote source: Financial Times Media
Article date: January 2006
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