Property investors should be aware ofthe risks

The asset class has enjoyed a strong period of outperformance over equities and bonds in the past decade and, while it remains a strong asset class, many investors do not know enough about the risks involved

Howard Davies, chairman of the Financial Services Authority, has warned that retail investors may be failing to understand the risks associated with investing in commercial property. The asset class has been enjoying a sustained period of strong performance, outperforming equities and bonds over 10 years to the end of 2002. So it is not surprising private investors are turning to commercial property as a source of diversification, perceiving it as a safe haven in a continuing equity bear market. In 2002, the IPD Monthly Index recorded property returning 10.5% (income and capital), ...