Opportunities still exist in Europe for investors
looking to increase their exposure to foreign real estate.
However, rental growth and active management are expected to be key components to success.
Central and Eastern European markets are likely to be at the forefront of investment activity, with the strongest medium-term returns predicted, the Invesco Real Estate spring 2011 House View report said.
In addition, a combination of bond rate movements, globalisation of capital flows and increased development will push some prime Western European yields outwards over the next five years.
Greater differentiation between European countries is expected in the short-to-medium-term, with Germany, Switzerland and the Nordics continuing to outperform with GDP growth
"We believe the office sector will deliver the best short-term returns in supply constrained city centres, whilst in the medium term the retail is expected to be the strongest performing asset class, supported in Central and Eastern Europe by a burgeoning and wealthier middle class," the report says.
- Thursday 19 May 2011