Office and commercial property has been the best investment in Britain over the past decade, posting a return of 186%.
According to data published today by the 'Royal Institution of Chartered Surveyors' (RICS), the commercial real estate sector has in fact recorded a better performance than markets such as that of shares, 'gilts' (bonds issued by the British Treasury) and gold, over the last ten years (until the beginning of September).
The index of the 100 largest British companies, the FT-100, returned only 84% in the decade in question, while the 'gilts' reached a return of 142%. Gold, however, fell by 5%.
Even during last year, until the beginning of September, investing in commercial real estate was the winning choice: the sector gained 10%, followed by 'gilts' (+ 9%), and gold (+ 6%). The shares instead lost 21%.
According to the Rics, focusing on commercial real estate in Great Britain still provides good profit opportunities, despite fears that the sector has now reached its peak and risks collapsing.
'We are not suggesting - said Ray Barrowdale, of Rics - that private investors with little experience dive into the market. But commercial real estate appears to be the most attractive sector for investors, as long as the outlook for stock markets remains uncertain.'
However, some experts highlight the risks: 'If we go into deflation - observed consultant Brian Dennehey, of Dennehy Weller Co. - commercial property values will collapse'.
source: Real Estate Observatory
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