With equity markets seen as volatile at present and cash and gilts yielding little, commercial property is increasingly seen as an attractive, medium-risk investment. According to Conor Murphy, director of National Deposit Brokers Ltd in Dundrum, Dublin, the primary benefit for the private client investing in Irish or UK commercial property funds is that it's a "low-cost, tax-efficient, liquid means of gaining access" to the commercial property market.

Private clients don't need to trawl through available commercial properties "and you can get in for an amount as low as £5,000", he says. Inter-related charges are associated with each fund "and that's where you've a competitive edge from one fund to the other. And you can have, with some funds, a restraint in getting out. For example, if a lot of people decided they wanted to get out of a commercial unit-linked fund at the one time, the fund managers can impose a six-month restraint on people selling out." But that's the only limitation on their liquidity, he says.

"You have to look at the markets themselves and see what the anticipated returns are for the coming years before you buy into one of these funds. There's a fair argument to say that the Irish commercial property market obviously has been very strong over the last three to five years. And you know it can only continue for so long."

A year to 18 months might be a fair projection but it's difficult to forecast further than that. "With the UK commercial property market, there's a sense that it's been a laggard to the Irish market, so-to-speak. And sterling's anticipated joining of the euro over the next three to five years should really put it in the same kind of mode that the Irish commercial market has been in for the last three to five years. In other words, it would appear as if it's about 18 months behind the Irish commercial property market."

He believes a long-term investor looking at property "may be wise to use a UK fund, albeit over the next 18 months my own view would be that the Irish commercial property funds would outperform the UK ones".

Commercial property funds provide a cost-effective way for private clients to get involved with commercial property, without all the hassles of raising funds, finding and managing a property or selling it, he says.

Returns from the average fund over the last five years have been 116 per cent net of tax. "So, if you're comparing like with like here, obviously if you buy a property and you lease it out, whoever your tenant is, is paying your mortgage, so if you hold on to it for a full 15-year term, we'll say, then obviously you own the property outright. You've got the capital appreciation over that 15-year period, plus the income as well. Whereas with a property fund, the properties are yielding an income plus capital appreciation" but you don't own the property at the end of the day.