Investec Wealth & Investment will implement a £500 million (around $776 million) move into direct UK commercial property for its discretionary private clients, over the next 12 months.

Prior to its latest asset allocation committee meeting, IW&I’s recommended balanced portfolio had 2.5 per cent of funds invested in direct UK commercial property. The committee has voted to increase this amount to 5.5 per cent, equivalent to a £500 million increase in the amount of total UK client money invested in the asset class, the firm said in a statement.

In reaching its decision, the asset allocation committee noted that, for many investors, commercial property is an asset class that embodies some of the positive characteristics of both bonds and equities - offering a relatively attractive level of income - with comparatively low volatility. 

“We are sending a clear signal to clients that, at a time of rising asset prices, commercial property represents a pocket of value that they should be investing in. Capital values outside London have hardly recovered from the lows of 2009 and yields are much higher than in London.  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," said Chris Hills, chief investment officer at IW&I.

Following the integration of Williams de Broë, IW&I has more than £22 billion in funds under management, as at 31 March 2013.