A deep dive into the UK’s specialist property market
• The office, retail and industrial sectors currently make up 91% of the IPD property investment universe, while the remaining 9% is invested in specialist property like hotels, student housing, health care facilities etc.
• The key attraction of specialist property investments is their exposure to sectors of the economy that have substantially higher growth rates than the national average.
• Most investors are content with a property portfolio that invests almost exclusively in the three dominating sectors, abstaining from the remaining 9% of specialist property. Without this exposure to specialist property, investors are at risk of missing some of the most attractive investment opportunities in the market.
• Specialist property investments offer all the usual benefits of property investments. Yields are similar to retail and office yields and rental income is typically linked to inflation so that investors don’t have to worry too much about rising prices in the future.
• On top of that, specialist property is often exposed to different long-term economic trends like an ageing society or changing consumer behaviours. In addition, rental agreements for specialist property tend to have a very long maturity, which provides investors with high visibility of future cash flows and additional peace of mind.
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