Should you buy into European property?
♫ Friday, February 29th, 2008The commercial property sector is cyclical, so it is important to have a flexible approach if you want to exploit the unique benefits of indirect property investment. The sector’s three key sub-sectors, office, retail and industrial, have all benefited from rising values in the past two years. However, as the market becomes tougher, a property fund’s ability to target niche property companies will be key if it is to continue to produce attractive returns.
At present, returns from quoted European property seem the most attractive. There are two reasons for this. Firstly, Europe is where the final leg in the globalisation of real estate investment trusts (Reits) is about to take place, with the UK and Germany, Europe’s largest real estate market, soon to introduce them. Italian, Scandinavian and eastern European governments are also drawing up Reit proposals.
