Real estate survey 2006: A perfect storm
It offers double-digit yields, is not correlated with the equity market and provides secure, long-term returns. Allocations of investment capital to real estate have therefore ballooned – and look set to keep on growing. Louise Bowman reports.
WHAT’S NOT TO like about real estate as an asset class? This is a question that many investors are struggling to answer. Everyone from private investors, property funds, the institutional sector, commercial and investment banks and traditional property companies just can’t get enough bricks and mortar into their portfolios. “Volumes of capital investment in real estate are at record highs globally and at half-year are tracking ahead of 2005 levels,” says Mike Strong, chairman at CB Richard Ellis, which tops the global advisory category in Euromoney’s real estate poll this year.
Strong points to the widespread re-evaluation of property as an asset class as the cause of this unprecedented strength of demand.