EUROPE - Four out of five asset managers predict a rise in demand for property investments on the back of the introduction of Real Estate Investment Trusts (REITs) in a number of countries worldwide.
Along with the expected demand for property, a new report “Property investment in Europe” found half of those surveyed believe REITs have the potential to rival corporate bond funds.
However the survey by market analyst Datamonitor also found two thirds of managers are unhappy with the efforts of their regulators to establish a REIT structure in their country with one in five expressing “particular dissatisfaction”. In Europe, France is the only country with an established REIT although Germany is in the process of introducing the structure.
Asset managers in Italy were the most dissatisfied with their regulators attempts to establish REITs markets, followed by Germany and then Spain, the report found.
In Italy, just 15% strongly agree that their regulator has done enough to support the development of REITs, compared to 35% in Germany and 42% in Spain.
The UK has published a consultation paper to assess development of a potential REIT structure with plans on track for a launch in mid-2006.
“Overall there is a strong sense among European asset managers that their national regulators have failed to do enough to support the development of REITs in their country,” Datamonitor said. “The launch of REITs in France and subsequent acceleration of the French REIT market appears not to have gone unnoticed by asset managers sitting in other European jurisdictions.”
The concept is gaining strong interest in Europe in light of the success of REITs in Australia and the US. In Finland, the industry is pushing for the development of a Finn-REIT with the government set to come out with a report into possible changes to real estate investment, by the end of May.
Across Europe, half of managers expect growth in property investment of at least 5% per annum over the next three years, Datamonitor said.
The research involved 100 managers in the UK, France, Spain, Italy and Germany.
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