Compelling Real Estate Investment Opportunities Remain For Some European Countries
20 June 2012 (PLANSPONSOREurope.com) - Real estate investment opportunities can offer institutional investors including pension funds sustainable returns but investors should exercise caution on the direction of investments due to an impending property crash set to hit Southern Europe, according to experts at Standard Life.
At an event at the investment firm’s City of London offices, Anne Breen, Head of Real Estate Research and Strategy, said that it expects the asset class to deliver returns of between 5% and 8.5% over a three-year period.
She added that in Europe there were some attractive good value opportunities in the Nordics and areas such as Paris.
Breen said the firm favoured developments within global central business districts, retail in the largest shopping centres as well as high yielding logistics and distribution real estate.
But fellow speaker Andrew Milligan, Head of Global Strategy, warned that the outlook was not as bright for real estate in countries such as Spain.
“We all know what the outlook for the Spanish property market is going to be. It is a slow motion version of what we have seen in Ireland for the last couple of years so we are going to be expecting peak to trough collapses in residential and commercial property values in many areas because that’s what we have seen in Dublin. Madrid and other cities are going to be seeing those sorts of issues.
“We will inevitably see a major property crash. It may be a major property crash, a minor property crash or an apocalyptic property crash but we are going to be seeing some sort of property crash in many European cities over the next couple of years then eventually we will see buying opportunities. That will be a couple of years away at best.”