Richard Stacker
Financial advisers have earmarked Europe as having the strongest growth opportunities in the global property market, according to a recent survey.
Research conducted by property fund managers Macquarie Direct Property (MDP) saw more than 300 advisers surveyed to determine the level of interest Australians have in global property investment.
The results indicated that the majority of the financial advisers surveyed, 30.4 per cent, expected the strongest growth opportunities for property investment to be in Europe.
This was followed closely by Asia (Hong Kong, Singapore, and Japan markets) with 25.7 per cent, China with 24.9 per cent and 12.7 per cent in emerging Asia (Philippines and Malaysia).
Only 3.7 and 2.6 per cent of advisers believed there would be strong growth in the UK and US property markets, respectively.
MDP general manager Richard Stacker said the results were indicative of the growing confidence retail investors have in the European and Asian property markets.
“Europe is now emerging as a significant market in its own right. Its strong economic growth and employment trends attracted investment of approximately $7.4 billion by Australian property funds in 2006, a significant 350 per cent increase on 2005. We see this trend set to continue in the medium term,” Stacker said.
The survey found that 97.7 per cent of advisers are already recommending their clients include global property investment within their portfolio, due in part to the strong growth outlook and income.
Advisers also indicated that the property asset classes that currently present the strongest growth for investors were offices, followed by industrial, retail and hotels, respectively.
Stacker said the results reinforced the fact that global property was now considered a mainstream investment.
He also emphasised that whilst the results showed Europe to have strong opportunities, “to treat Europe as one country would be a mistake”.
“There are fundamental differences between each country or sub-market which need to be understood and accounted for when investigating investment opportunities.
“These include variances in lease structures, real estate taxes, transaction and ownership costs, investment and valuation considerations, owners’ and tenants’ rights and owner/tenant relationships.”
