Investing in commercial property could bring higher returns than
capital markets, according to Gerrie van Biljon, executive director
of Business Partners.

Having recently allocated £500m of its annual investment budget
to commercial property, risk finance firm Business Partners are
clearly confident in the performance of property assets.

Business Partners hopes to de-risk its investment portfolio by
developing a property strategy which will create sustainable
returns. Gerrie van Biljon feels that property offers better long
term risk-return rewards and is confident of continued
improvement:

"Money and capital markets returns offer low yields in
comparison with properties. Commercial and industrial property
remains an attractive investment for entrepreneurs, either as a
sound long-term investment or to secure tenure for their own
business operations."

Marius Muller, CEO of retail investment property company Pareto,
feels that government expenditure, designed to get the economy
going, will make the property sector more attractive.

He feels that expenditure will "assist the property sector in
terms of filling vacancies, stimulating new development and
activity".

"We are starting to see, on the industrial side, there's
significant movement already," he said.

Muller also argued that demand for good-quality logistics space,
close to major cities, will rise due to increasing transport costs.
Rising demand for industrial property
will also create additional demand for support services and an
uptake of office space.

The only concern noted is that the listed property segment is
seeing a significantly higher number of smaller transactions.
Transactions have often been limited to smaller, lower-quality
portfolios, with larger properties not being sold.

"We (expect) some sort of consolidation that will happen between
those funds to get them up to a chunky size where they can be
attractive to fund managers and investors," Mr Muller said.

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