Investing in property

Commercial property investment can deliver major diversification benefits to any equity-oriented portfolio. Property is relatively uncorrelated to equities and indeed other asset classes.

Similarly, property - and associated commercial property equities - appreciates or depreciates nearer the end of an economic cycle, meaning that its inclusion in a portfolio is an effective counter-cyclical tactic.

For example, at the start of 2000, when the FTSE-100 was around the 7,000 mark, one of the UK's largest quoted property companies, Land Securities, was quoted around GBP 6.50. Towards the end of 2003 the stock was quoted at GBP 9.95, meanwhile the FTSE dropped by about one-third. Similarly, British Land's share price rose from GBP 3.50 to GBP 5.75 over the same period.