UK Commercial Property.... in, out - shake it all about..?

Lots of chat over commercial property again - if you're looking for a subdued asset class then this might be it - just have a look at this chart I pulled from a well known UK fund.

One thing to be wary of is the need for good corporate lending to fund new property builds, boost occupancy rates etc. So you tend to need a recovering cap spend across the market. For this we need to be sure there are no lingering effects of the market dislocation in 2008 and that banks are happy to lend for new projects. I also wonder if companies will ever again be as ambitous in the size of builds - the RBS HQ is a lesson other companies may heed. The flip side is that more companies may lease existing prime real estate rather than build their on off-site locations. I think there are opps either way.

I'm going in quite hard - I'm trying to offset Global REITs (Real Estate Investment Trusts) with UK Commercial property - both via mutual funds which immediately makes them more long-term bets. In the US a lot of recovery has already priced in: the UK looks slower and so might have more margin. Generally property tends to lag the mainstream recovery - beware the risks and buy with a clear exit plan.

Have fun..
JB