UK - UK commercial property will continue to provide solid returns next year, according to Credit Suisse Asset Management.
The company said the sector had already produced strong relative results over three, five and ten-year periods.
Property returns for this year to end-October were 8.8%, according to the IPD Monthly Index.
CSAM believes returns are likely to close the year higher, since many institutions are reviewing asset allocations and looking to invest.
The company said it believes that a rise in base interest rates up to 4.25% has been priced in, and therefore an increase in rates to this level should not have a negative impact on yields unless there is a fundamental downturn in business confidence.
Glenn Newson, head of UK property at CSAM, said: “Commercial property should be viewed as a core component of a portfolio rather than an alternative asset class, especially as its characteristic of providing a good income return fits very well with that required by a mature pension scheme.
“Allocations have not notably risen this year, but we expect to see them rise in the future, as a long term strategic part of asset allocation.”
Meanwhile, CSAM has appointed Michael Buchanan as head of US credit products in the fixed income division. Based in New York, his role will be to further strengthen CSAM’s existing credit capabilities, and to explore new opportunities and products.
He joins the firm as a managing director, and will report to Dennis Schaney, CSAM’s global head of fixed income.
Buchanan was formerly an executive vice president at Janus Capital Management, working as a portfolio manager for high yield products. Before that, he was a senior portfolio manager at BlackRock Financial Management, and was responsible for all high yield trading.
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