Room for improvement? UK PAIFs fail to 'evolve with the market' as offices and retail dominate portfolios

Empty offices still no deterrent for confident investors

Open-ended UK property funds are leaving themselves open to weak returns as a result of a bias towards the retail and office sectors on top of the high cash weightings they are holding to ensure liquidity, experts have warned.

According to the Q2 RICS UK Commercial Property Survey, the UK retail and office sectors were hardest hit by the pandemic, with property values expected to fall sharply over the coming year. Globally, research from property specialist JLL shows that since 2010 investment volumes into offices and retail have fallen from 40% to 33% and from 24% to 12% on average, respectively. FCA eyes 180-day notice period for property fund redemptions The average fund in the IA UK Direct Property sector holds 21.4% in offices and 10.3% in retail as of 31 October 2020, based on FE fundinfo calculati...