Last week property company Land Securities warned that the UK commercial property market had peaked and there were signs of a slowdown. Chief executive Francis Salway said some properties were now worth less than a year ago and warned: "This is a big deal."

The commercial property market is still booming, with demand growing at its fastest pace in seven years, driven by a strong economy and record profitability in British industry, a survey showed yesterday.

What is a Reit?

It's a new type of company that allows investment in commercial or residential property to produce tax-efficient rental income. Ninety per cent of this income must be distributed to shareholders of the UK-Reit and, in return, the company is exempt from corporation tax and capital gains on property sales.

Who can invest in a Reit?

Anyone can buy shares in a Reit, much like a unit trust.

Why invest in a Reit?

Stephen Herring of accountants BDO Stoy Hayward says not only can the Reit avoid paying corporation tax and capital gains, but the investor can also avoid paying tax on their dividend income if their shares are held, say, in an ISA or a self invested personal pension (SIPP).

Any potential pitfalls?

Some experts argue the property market is nudging its peak so investing now might prove to be a mistake, despite the attractive tax breaks.

The £421m purchase of part of Covent Garden shows the sector is booming, but some fear a crash is around the corner, writes Jonathan Russell.