What is property? The answer is obvious and the question may come across as one of those profound-sounding questions that you get in undergraduate philosophy exams, but in the current post–global financial crisis environment I think it is a valuable question to ask, and one to which the answers could open up avenues of property investment that are currently being missed.

Property has traditionally been included in a diversified portfolio for four main reasons: diversification, the potential for inflation hedging, high stable income and a good risk-return ratio relative to other asset classes. In these terms, the case for property still stacks up. Its correlation with equity and bond markets is low enough for it to provide a worthwhile degree of diversification. Over the longer term, it does act as a hedge against some, but not all, types of inflation. Relative to government bonds and equities it offers a high level of income return, and the income is relatively