Investing In Properties

Many investors still defend investing in commercial properties in the UK. An upward swing in prices is predicted toward the end of the year. As of today prices are hugely discounted and good returns are expected for those investing in the UK properties at current entry points.

Buyers shied away from investing in properties through the second half of 2007 and the market saw a rapid downturn and sharp correction of values. Fund managers reported considerable outflows. Whilst buyers are not yet investing in properties in droves, some fund managers feel that the situation is set to improve. New Star Asset Management, which was hit by its exposure to investing in properties said there were signs of positive change. Their outflows are now down to the hundreds of thousand and they feel there are lots of buyers who find value in investing in properties now.

In a FT report Rob Martin, head of research at Legal & General, is quoted in support of investing in properties saying, the case for property investment "remains a strong one".

He went on to say that investing in properties though apparently bleak in first half of 2008, expectations are that the "fundamental attractiveness of the asset class" will reassert itself as the year progressed. The valuation of property relative to other assets has already improved substantially. With property prices falling further, investing in properties now will reap higher dividends.

Prices make investing in commercial property very tempting. As of February, prices for UK commercial property had fallen by 14.7 per cent from their June peak, according to the Investment Property Databank Index. More cautious buyers are holding out on investing in properties till the effect of Bear Stearns on the vacancy rates of commercial property is seen. However many feel the market has bottomed and valuations are capturing the attention of bargain hunters seeking a windfall by investing in properties now.