Optimism revealed over commercial property outlook

Posted 29/09/2010

A rise in the number of investors turning to alternative assets could indicate growing optimism over the UK commercial property sector.

JP Morgan Asset Management revealed in a survey published earlier this week that alternatives – including business properties – currently account for 28 per cent of the portfolio of the average institutional investor.

This figure is up from 21 per cent three years ago, while many respondents said they expect their alternatives allocation to rise further and reach 31 per cent over the next two to three years.

Peter Ball, head of UK institutional business at JP Morgan, said the findings “confirm that alternatives are set to see further strong growth”.

He added: “It is clear investors are becoming more comfortable investing in alternatives as their understanding of such asset classes grows.”

Earlier this month, Timothy Lambert of private wealth management firm Ducalian claimed the commercial property sector is “still in a state of flux”.

He said both landlords and tenants are adapting to new market conditions in the wake of the recession.