Investment returns on UK commercial property up 20%

Investment returns on UK commercial property up 20%

UK commercial property provides investors with strongest returns in 2014 as returns swelled to just above 20% in the year to October.

Global Equities at a record high

Global Equities rose to a record monthly high in October providing returns, as measured by the MSCI World Total Returns Index, of 12.8% in the past year – the second highest in this review. Although global economic activity has been moderate, the distribution of that growth has been uneven; with a quickening pace in the US and UK, slowdown in the Eurozone and little change in China. The European Central Bank’s further cut to its interest rates and intended purchases of asset-backed securities to stimulate the Eurozone economy are likely to have supported Global Equities.

Returns on all asset classes up by 4%

The average annual return for the nine key asset classes has edged down from 4.6% in October 2013 to 3.9% in October 2014. While returns for several asset classes have increased in the past year there have been declines in returns earned on Precious Metals and Commodities.

After Commercial Property and Global Equities, the largest returns were in UK Residential Property (11.3%), UK Bonds (6.7%) and International Bonds (5.5%).

At the other end of the spectrum, investor returns fell in Precious Metals (-17.8%) and Commodities (-4.9%).

Residential Properties show strong growth

Over the past year, total returns (based on house price growth and rents) from UK Residential Properties grew by 11.3%. This was driven by average housing values rising by 7.6% and returns on private rents growing by 3% between October 2013 and October 2014.

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