The report details the continued attraction of UK institutionsto the commercial sector. Net institutional property investmentregistered just over £1 billion in the first quarter of the year,an increase of 8.3% on the previous quarter's total. Commercialproperty maintained its position as the best performing asset classduring the second quarter of the year with growth of 8.4% to Maycompared with a 4.5% fall in equities and 5.3% decline ingilts.

Knight Frank says that there are still many positives forinvestors to recognise, with overall rentals in the office marketremaining strong and still showing positive performance. Whilst therecent job losses in banking and finance together with high techand telecoms, the service sector still remains sound.

'Institutional intentions towards property for the remainder ofthe year are likely to be influenced by the anticipated performanceof other investment assets,' says Kapila. 'The expected higherreturn from property should encourage a higher level of investmentin the sector.'

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