Yields 'attracting investors to commercial property'

Commercial property yields are proving attractive to investors, an expert has claimed.

Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors (Rics), said that yields and the sense that "the bottom of the market is nearing" are two reasons such property is popular at present.

He explained that, when compared to asset classes like cash and bonds, commercial property historically offers "an attractive yield premium".

"What we are really seeing is an investor-led recovery," he added.

"It was an investor-led boom that led to the high price rises that we saw in the run-up to the 2007 peak in the market."

Recent research published by Rics revealed that commercial property activity rose across 70 per cent of the globe in the fourth quarter of 2009.

It also revealed that the UK property recovery has been led by the London office market, where the amount of space available fell for the first time in two years.