Commercial property

Commercial property funds (unit trusts)

Commercial property funds allow the smaller investor access to commercial property where otherwise large amounts of capital would be needed for investing directly.

They are a tax efficient way of gaining exposure to property, as CGT is not payable on sale of assets within a fund and investors are not liable for stamp duty.

They also provide greater liquidity than direct property investing and can be diversified across different properties, sectors and regions. For example retail shop fronts, offices supermarkets and warehouses. Or City, London and the Home Counties verses other parts of the UK.

They can be used to provide an additional source of income in a portfolio to complement fixed interest and equity income funds as rental covenants provide a steady source of income.

And as an alternative asset class, historically, commercial property has demonstrated a low correlation to equities and fixed interest (bonds), so providing a strong case for their use to further diversify portfolios as a defensive element.