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04/03/2002
Property investments are forecast to give ‘real’ returns of around 7 per cent a year until 2005, Savills Fund Management revealed recently.
Speaking at the Chase conference in London, director of Savills Fund Management, James Thornton, pointed out that property was the best performing asset class for the second consecutive year in 2001, and its good performance was set to continue. “Now is a good time to invest in property,” he said.
However, he said that most trustees did not regard property as a potential part of their investment portfolio. Trustees should reconsider, he argued, because property gives a high income yield, diversifies a portfolio and has historically been less volatile than gilts or equities.
He warned that direct investment in property is only for the larger charities with at least £25 million to devote to property. Smaller charities could invest via a property unit trust, but this would make them liable to pay stamp duty from which, as charities, they are exempt. Instead, Mr Thornton suggested that charities should consider retaining their stamp duty exemption by investing in a property common investment fund such as the Charities Property Fund.