Coronavirus has changed the property investment landscape forever

Put all this together and investing in property becomes more like stock-picking than the exercise in asset allocation it has traditionally been.

Managing an equity portfolio is part top-down, understanding the big themes and trends driving markets, and part bottom-up, picking the right stocks. Managing property requires a similar approach: getting ahead of the disruptive changes and putting the right tenants in your buildings.

Diversification is key to successful stock market investing. It reduces risk and provides a smoother ride. In property, diversification used to mean having a mix of retail, offices and industrial. Now it’s more about ensuring you are exposed to a range of sectors and industries so that you are not floored, as Intu has been, by problems in one part of the economy.

In a low-interest rate world, in which the ability of companies to pay a decent dividend has been compromised by the pandemic and bond yields are on the floor, commercial property will continue to attract money from yield-starved investors. But they will need to think a bit differently about what constitutes a prime portfolio by spending less time looking at the pictures, and more time reading the notes to the accounts.

Tom Stevenson is an investment director at Fidelity International and the views expressed here are his own.

He tweets at @tomstevenson63

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