ETFs 'a worthwhile option' for UK commercial property investors

UK property-tracking exchange-traded funds (ETF) are becoming an increasingly popular option among investors seeking secure returns from the commercial property sector, it has been observed.

Juliet Samuel of City AM notes that ETFs target the commercial property market by tracking a particular subset, namely the FTSE index of real estate investment trusts (Reit). This includes Land Securities, the UK's largest Reit with a portfolio worth £9.5 billion.

She therefore commented that ETFs present the advantage in uncertain economic times of offering exposure to property without the long-term commitment of buying assets directly.

"So while property ETFs don't provide complete coverage of the market, they do offer the ability to track the biggest investors for whom property is their sole asset class rather than investors like Tesco for whom owning real estate is a side effect of its retail business," added the columnist.

Ms Samuel also suggested that, given the continuing strong entrepreneurial demand for properties, opportunistic investors who pick the right moment to buy into a property ETF can stand to make good returns over the long term while still retaining the option to cut their losses.

Meanwhile, Tom Entwistle, director of LandlordZONE.co.uk, recently praised as "landlord-friendly" the coalition's Budget measures to reduce red tape such as its cancellation of the previous government's planned changes to holiday lettings tax incentives.