UK - Despite a slowing world economy, the number of pessimists has only increased from 2% to 5% since the previous year, according to the annual survey of the property investment market by Baring, Houston & Saunders (BH&S), a member of ING Real Estate.
The survey was carried out after the attack on the twin towers of September 11 and found 29% of respondents feel optimistic about the future.
Sixty-four questionnaires were completed from fund managers representing pension funds, life and general insurance companies and unit linked funds. In total respondents are responsible for management of £60.7bn.
Property weight in portfolios have increased by default due to the significant fall in equity prices in 2001 - therefore the 80% who stated that their property reweighting had increased was not a surprise. However, given the fact that property was the best performing asset class in 2000, and out-performed equities over not only three years but also five and 10 years, BH&S hopes that at least some of the reported increase in property's weight can be attributed to positive asset allocation decisions.
An interesting trend throughout the survey's history is that property fund managers' expectations of an increased weighting towards property have belied the reality. Last year 15% of respondents to the survey expected an allocation of new money into property. This year's leap to 37% suggests that property fund managers remain optimistic concerning the future performance of their asset class relative to gilts and equities.
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