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'Commercial property has provided strongest returns in 2014' - Lloyds

Wednesday 26th November 2014

Investment returns on UK Commercial Property grew by 20.1% in the year to October - the highest among the nine key asset classes - new research by Lloyds Bank Private Banking has revealed. 
 
Overall the average annual return for the nine key asset classes has edged down from 4.6% in October 2013 to 3.9% this October. 
 
After Commercial Property and Global Equities (12.8%), the largest returns were in UK Residential Property (11.3%), UK Bonds (6.7%) and International Bonds (5.5%). 
 
At the other end of the spectrum, investor returns fell in Precious Metals (-17.8%) and Commodities (-4.9%).
 
Ashish Misra, Head of Investment Policy at Lloyds Bank Private Banking, commented: “Investment returns on UK Commercial Property have been boosted as investor confidence has improved on the back of a positive economic outlook.” 
 
“Recovery in both the occupier and investments markets has been in full swing for much of the past two years raising demand, and with supply slow to respond, driving up rental growth and capital values. Whilst demand in London has driven returns for much of the period, recovery in the regions appears to be coming through more strongly now as well."
 
Coffee was the top performing commodity over the year with a price rise of 76.1%. Rising supply side pressures resulting from the worst drought in 50 years in Brazil, the leading coffee producing nation, have underpinned the marked increase in coffee prices. 
 
In contrast, Lloyds has confirmed soft wheat as the worst performing commodity, recording a 34.9% price decline. 
 
Crude oil, corn, soya beans, heating oil and hard wheat also recorded price declines in the range of 16% to 27.5% based on expectations of increased supply. On the other hand, there were price increases in zinc (20.7%), aluminium (13.3%), and cocoa (9.5%). 

Average asset class returns over 6 months, 1 year and 10 years to October 2014

As at October 2014

6 month % change

1 year % change

10 year % change

UK Commercial Property

10.2%

20.1%

77.2%

Global Equities

6.0%

12.8%

103.0%

UK Residential Property

6.5%

11.3%

53.2%

UK Bonds

5.4%

6.7%

71.7%

International Bonds

3.5%

5.5%

46.3%

UK Shares

-1.6%

1.0%

116.1%

Cash

0.2%

0.5%

28.7%

Commodities

-14.7%

-4.9%

70.2%

Precious Metals

-13.0%

-17.8%

107.2%

Average

0.3%

3.9%

74.8%

 





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Editorial Contact Details - Conor Shilling
conor.shilling@angelsmedia.co.uk
0845 672 6000
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