Commercial property investors advised against open ended funds

Spreading ventures over a number of specific individual real estate assets is the best plan of action for commercial property investors, new research has found.

The recent findings from the Investment Management Association have suggested that investors, instead of placing their money in open ended funds, should spread their cash over a number of assets.

The figures showed that commercial property is now among the top five selling investment classes thanks to a significant increase in interest in recent months.

According to CB Richard Ellis, strong demand from foreign investors resulted in central London investment volumes increasing significantly during the second quarter of this year.

However, creator of niche commercial property investments, Tritax, has noted that property funds have moved to third place within the top five as the sector is beginning to show signs of losing momentum. As a result, they warned investors to 'exercise caution.'

According to the firm, opportunities to snap up properties that offer the best return prospects can be missed by open ended funds as their actions are dictated by cash flows.

Tritax said that these open ended funds often end up "having to buy property regardless of whether it offers good value" and investors will be better placed spreading their bets.

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