Commercial property yields 'are clearly attractive'

Initial yields on commercial property have become "clearly attractive" in recent months, according to new research.

The study by CB Richard Ellis (CBRE) revealed that yields averaged 7.5 per cent in the three months to October, which the body has stated could prove popular in comparison to returns on cash and gilts.

It also revealed that positive sentiment towards property is evident across bodies including pension funds, actuaries and retail investors, while this is translating into higher allocations towards such assets.

Peter Damesick, head of UK research for CBRE, said: "Property now has a very good chance of delivering a positive total return in calendar year 2009, a dramatic improvement on expectations of only a few months ago."

Previous research by CBRE found that Germany, the UK and Spain drove growth in the European retail property investment over the third quarter of 2009.

Investment in the asset category reached over €5 billion (£4.47 billion) over the period.