Fund manager Managing Partners Limited (MPL), which runs the British Property Opportunities Property fund, is looking to increase its exposure to commercial property. It says that there are some very strong yields to be obtained in the sector and that many commercial properties are currently attractively priced for cash rich funds and investors.
MPL's British Property Opportunities Fund invests in both residential and commercial property, including distressed portfolios, high yield rental units, development opportunities, leasebacks and reversionary gains schemes. To date the fund has been solely focused on the residential property market but it is expected to move into the commercial sector this year.
Jeremy Leach, Managing Director, MPL said: "Commercial property values are now down by 41% since their peak in 2007. This means that there are a number of attractive opportunities for us in this market and we feel that current yields, even allowing for a realistic allowance for tenant fallout, will provide a strong real return. You can get yields of 8% to 9% on commercial property that on their current value can also enjoy some strong capital growth two very attractive features.
"Compelling valuations, a degree of transparency and a relatively secure income are returning to the commercial property market and for this reason we are looking to increase our exposure to this asset class."
However, MPL warns that investors still need to tread carefully and choose a property that is in a good spot with reliable tenants, and which is undervalued."
The British Property Opportunities Fund was launched in February 2008 and since then it has provided an annualised growth return of 7.02%. The minimum investment in the fund is £50,000 (57,200), or £2,500 if an investment is made via an insurance bond or SIPP wrapper.