Commercial sector to peak

despite high single-digit returns predicted for 2006, scope for further growth looks limited

The office market may be driving the strong returns seen in commercial property but Paul Herrington, head of property investment at F&C, believes the sector as a whole may soon reach its peak. With this in mind, he is urging caution when investing in property and believes people should pay particular attention to quality of location, tenant, building and lease. While another good year is expected for 2006, with high single-digit total returns predicted, low yield levels and interest rate rises in the UK and abroad mean the scope for further growth is limited. Other concerns in the sec...