Location still key for property investing

The best properties to invest in today are in peripheral London, according to Philip Nell, manager of the Aviva Investors Property Trust.

“The old adage of ‘location, location, location’ is still very important, if not critical,” he added in this month’s MM cover story on commercial property.

But for Guy Glover, co-manager of the £65.1m F&C UK Property fund, properties are not chosen purely due to location, although he does admit there has been a bias in London as it has been “roaring ahead” over the past couple of years.

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“People will say there is surely a geographical area that will outperform, and yes, central London has been roaring ahead for the past couple of years. But there are also some buildings in central London that have not seen any value growth. Although there may be a building in Edinburgh that has managed to secure 17 per cent in rental value growth,” he said. His fund invests in property from Scotland down to Chichester.

The property space has been growing in popularity in recent years, with the sector seeing a continued increase in net retail sales for eight consecutive months to September 2013. According to the latest figures from the Investment Management Association (IMA), funds in the sector reached £177m in September – the highest level since June 2010, and well above its monthly average of £77m for the previous 12 months.

There have been some new fund launches over 2013, and just yesterday, Kames Capital announced it is to launch a property authorised investment fund (Paif) in quarter one of 2014.