Double Digit Return in Global Commercial Markets?

Global commercial real estate markets will return close to double digit returns over the course of the year. Underpinned by resilient income yields, the asset class is expected to outperform other investments....

Global commercial real estate markets will return close to double digit returns over the course of the year. Underpinned by resilient income yields, the asset class is expected to outperform other investments.

With low interest rates and a moderate economic recovery in many worldwide destinations, the relatively secure yield from real estate remains attractive, analysts from Standard Life Investments claimed in their recent Global Outlook survey.

Added to this, the organisation said that as occupier confidence and business investment increases, tenant demand should start to pick up, with strong rental growth the long-term outcome.

David Paine, head of real estate investment at the firm, said: "Globally, given that development financing disappeared rapidly as a result of the credit market problems, the supply of good quality new space is at low levels in most markets and we expect this to continue over the medium-term leading to an improvement in yields."

He added that as investors become more concerned about inflationary pressures they are increasingly looking to real estate as a safe haven.

- Friday 08 April 2011

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