According to new research by Dentons Pensions, 41 per cent of new self-invested personal pensions (SIPPs) are being invested into the UK commercial property sector.
Dentons has revealed that in the first ten weeks of 2013, 41 per cent of new SIPPs that had been developed with Dentons decided to invest in commercial property. Not only is this the highest amount that the firm has seen but it is up dramatically from the 19 per cent recorded this time last year.
Analysts suggest that these figures have been caused by a sudden boom in interest from business owners wanting to buy various properties from which they will trade. Investors meanwhile are seeing commercial property as a constructive way to deal with their pensions.
According to IFA Online, Martin Tilley, director of technical services at Dentons, said: “If the business is going to pay rent, better into a tax advantaged pocket of their own wealth than someone else's.”
Mr Tilley further recommended that investments must be treated with “common sense” by giving clients a lot of freedom so that they can choose their own valuers, solicitors, insurers and property managers. This, in turn, will attract more SIPPs to invest within the property market.
Dentons further revealed in its report that many investors had been disappointed with ‘virtual pensions’ as receiving only one statement a year gave very little information about the results of their investment.
The UK commercial property market has seen great growth in the first two months of 2013 and analysts hope that these trends will continue for the rest of the year. A very weak first quarter of the year caused the market to fluctuate severely in 2012, and so investors had been more hesitant to place their money within the sector.