Legal and General underlines attraction of commercial property market

Now could be a good time to invest with UK commercial property agents, according to a new report by Legal and General.

A study released by the firm has revealed that commercial property returns were fairly modest in 2012, falling by around three per cent.

Meanwhile, total returns over a five-year period were just 0.5 per cent a year on average.

Despite this, Rob Martin, director of research at Legal and General, said that he expects the market to improve over the coming months, meaning now could be a good time to part with your money.

"A number of subsectors which have been shunned by the risk adverse environment are now priced to deliver above-average returns," he said.

There are a number of subsectors which have largely been ignored by the risk-averse environment over the last few years.

Now, however, investors in these areas can expect to enjoy above-average returns over the next 12 months, according to Mr Martin.

He said, though, that the London property is distinct from the rest of the UK, observing that there are specific factors that influence returns in the capital.

"Within London," Mr Martin explained, "opportunities to drive strong returns are set to be linked to a far greater degree to transport infrastructure improvements and particular occupier hotspots than has been the case in recent years."

He said, too, that 2013 will present investors with the opportunity to speculate on a broader spectrum of real estate assets, such as student accommodation and healthcare.

Earlier this month, the CBRE Monthly Index suggested that the UK's commercial property market is in a relatively stable condition.

The figures confirmed that the landscape barely changed between the end of December 2012 and the first month of this year.

Indeed, central London offices were the only sector where capital values increased (0.3 per cent) for the ninth month in succession, mirroring the final month of last year.