Property is arguably a more complex investment in comparison with most other asset classes for reasons of regulation, low liquidity, the requirement for management and the legalities around leases, ownership, etc. However, it is the income generating potential of property which is its standout feature and above all property should be viewed as a long term income generating asset.
Property is also a cyclical asset class and values will ebb and flow depending on a number of factors including interest rates, the economic backdrop, the availability of finance as well as simple supply and demand. As a result market timing can be important, although less so for long term investors.
The Chart below should make the case as well as anything for property as an appropriate long term investment for your retirement arrangement and for your personal portfolio and shows the performance of UK property (IPD Index) compared with equities (MSCI World Index) and bonds (Barclays Global Treasury Index) over a 20 year period ending March 2017.
Our advice seeks to optimise the investment returns through identifying a suite of investments from our list of recommended funds reflecting our clients’ personal circumstances and preferences. As advisers, we are strong believers in the appropriateness of property as a core asset for our clients’ retirement arrangements and personal portfolios. However, while retirement arrangements and personal portfolios should have an exposure to property, it is not advisable for it to be the dominant asset. Our recommended ranges for property for each Risk Category are as follows:
|0% to 15%||10% to 20%||15% to 30%||0% to 10%|
In addition, there are myriad ways to gain exposure to property and all routes should be considered with one of our advisors before making a decision. The more popular ways to achieve property exposure, many of which are on our list of recommended funds, are as follows:
We will be hosting an exclusive seminar for investors interested in property as an asset class in the RDS on Wednesday 29th March where our Investment Director Terry Devitt will talk about these various options to gain exposure to the property market. Marian Finnegan of Cushman Wakefield Sherry Fitzgerald will be our guest speaker and will give a general overview of the property market. Should you wish to receive an invitation to the seminar please email firstname.lastname@example.org.