Has Covid-19 killed off property's role in portfolios?

Has Covid-19 killed off property's role in portfolios?

Property will remain a key part of a balanced portfolio, despite the uncertainties of the pandemic, according to the guests on the latest edition of the FTAdviser Podcast.

Over the past year working from home as gone from being a niche lifestyle, to something workers up and down the UK are doing every day.

Offices across the UK are empty, along with bars, restaurants and other hospitality premises. And on top of this many are shopping from the comfort of their own sofas.

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But what does this mean for investors in commercial property and for those using it as a diversifier in a portfolio?

This week FTAdviser special projects editor David Thorpe discusses this issue with David Jane, multi-asset fund manager at Premier Miton Investors, Rob Burgeman, investment director at Brewin Dolphin, and Rogier Quirijns, head of European real estate at Cohen and Steers.

Jane said: “Property has a hybrid role between equities and bonds, and I think that will continue. Its a very particular feature of this down cycle that property was affected.

"But in future, whatever happens there will still be people, and they will still need to be accommodated, while property is linked to the movement of bond yields, and to the wider economy, it will still have a role to play in a mixed asset portfolio.”

Burgeman said: “Though if there is one thing that has been brought home to people it’s that property is not a risk free asset class, and an illiquid asset class.” 

Quirijns added property would remain key to portfolio construction, but the pandemic meant clients will have to be more selective about what they buy in future. 

To listen to the full podcast click play on the player above. FTAdviser's podcasts are available on Acast, Apple Podcasts, Stitcher and Spotify.