Commercial property offers the scope for capital growth and an Income from income from rental payments commercial It is normally seen as less risky than shares, but more risky than bonds property Commercial property is a term for the buildings that are Tenants and leases used for business, such as offices, warehouses and shops. Commercial property is generally rented out to a tenant Because of the required size of investment needed to buy who holds a lease on the property for a fixed period of commercial property, most people will only invest in this time. The lease will have a pre-agreed end date and asset class by buying shares in companies that own and a rent which will be paid on a regular basis, providing manage property or through investing in a property fund. a predictable, regular income for the term of the lease. A fund may own shares in property companies and/or Rents are generally reviewed every five years and are invest directly in physical ‘bricks and mortar’ property. usually only revised upwards. Income focused One risk to be particularly aware of is that property tends While it is possible to achieve capital growth through to be more difficult to sell quickly than shares or bonds. property investment (in other words, if the property were Therefore, you may not be able to sell out of a property sold for more than the amount it cost to buy), property fund as easily as other types of fund. income tends to be the key driver of overall returns. The value of investments will fluctuate, which will cause Of course, capital loss is also a possibility if the value of fund prices to fall as well as rise and you may not get back the property falls. the original amount you invested. 10