The Investec Wealth and Investment Balanced Portfolio currently has 2.5% of capital invested in the asset class. This will be increased to around 5.5% over the course of the year, £500m in real terms, bringing the firm’s total property holdings to £1bn.
UK commercial property is on the target list, with open-ended funds and bespoke products tracking established property indices being used to access the assets.
Chief investment officer Chris Hills said the firm would be looking for opportunities outside of London, where values were yet to recover, and yields were much higher. No specific regions have been named as targets.
The move is a response to current pricing and the long-term ability to generate revenue growth.
Hill said: “We believe that some of the weight of money going into London in the past few years will extend into the UK’s regions as confidence in our economic recovery increases.
“And at today’s prices investors also appear to be neglecting property’s long-run ability to generate revenue growth, something industry trade body the IPF expects to see returning in 2014.”
Evidence of the recovery in the global real estate market was evident in Q1 2013, when transactions reached their highest level for five years at $105bn, according to a report by Jones Lang LaSalle.
London was among the top 10 global cities by transaction volume, with over half of transactions in the city being cross-border, as overseas investors sought exposure to one of the largest European markets.
