Institutional investors are continuing to add prime real estate assets to their portfolios, it has been noted. The Savills Market in Minutes report for July revealed that investors are seeking out property sectors where there is room for further compression of yields - although the firm pointed out that in certain classes, it is believed that they are correctly priced.
Shopping centres and retail warehouses were the only two categories to report a hardening of prime equivalent yields between May and June this year, the research showed. However, the organisation expects to see yields compress in several areas, including retail warehouses, provincial offices, industrial multi-lets and offices in the M25 region.
Savills also cited the IPE European Institution Asset Management Survey 2011, which found that 26 per cent of investors surveyed intend to increase the amount of real estate assets they hold in their portfolios over the course of this year. The company went on to point out that, as the focus is on prime locations, there is unlikely to be enough property on the market to meet demand. Earlier this month, a report by Henderson Global Investors predicted that central London sites will retain their appeal among investors as growth prospects in the capital are good.
- Wednesday 27 July 2011