The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Advisers ride the wave of real estate investment

As real estate establishes itself as an asset class of choice for investors large and small, advisers are reaping the benefits. The next product in the production line could be property derivatives.

What is a property derivative                          Why the UK may turn to Reits

DESPITE THE RECENT rebound in equity markets, with the Eurotop 300 index returning 18% to investors between June 2004 and June 2005, investors are itching to increase their exposure to property. Why is property investment at an all-time high and how are competing retail and institutional investors accessing the market?

Luca Giangolini, a partner in the capital markets group of global property advisory firm Cushman & Wakefield, Healey and Baker, says: "When the stock market dropped to 3,000 points after the dotcom bubble burst, there was a move away from equities to direct investment in property. Pension funds also looked to property for its bond-like attributes such as upward-only leases in the UK."

The burgeoning property investment market has also been driven by the low cost of debt. Although yields are compressing they remain above the medium-term borrowing rates and this is highly attractive to investors, not least to high-net-worth individuals.

The total amount of private debt outstanding to commercial real estate was in the region of £153 billion ($275 billion) at the end of the first quarter of the year, up 13% on the previous year, according to the latest research by DTZ.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree