PORTUGAL - The property market outperformed all other asset classes in Portugal in 2002 with a total return of 13.5%.
Indices from the Investment Property Databank - the first Portuguese results produced by the IPD - reveal that bonds also performed well on +10%, up four points on 2001.
Cash returns deteriorated slightly to reach 2.8 % and equities had another poor year with returns of -26%.
But Portuguese property proved one of the most resilient markets in Europe in 2002.
“However, this was below the 2001 return due to slower capital growth and lower income returns,” said IPD.
“Rising vacancy rates affected most sectors of the market, resulting in income returns of 7.5% - the lowest in the last three years.”
Retails were by far the strongest sector, followed by residential and other properties, while offices continued to lag behind.
A recent study by JPMorgan Fleming showed that real estate continues to be the most popular asset class among investors, with a total of 70% of European institutions, including pension funds, currently making commitments.
The survey polled some 341 institutional investors across the UK and Continental Europe, representing over e1trn in assets.
The results were seen as broader drive towards alternative investments.
Peter Schwicht, head of European institutional business, JPMorgan Fleming, said: “The lower correlation suggests that they [investors] will invest more into alternative assets, and that alternative assets are becoming a ‘standard’ instrument.”
Asked if European pension funds were more receptive to alternative investments compared with their UK counterparts, Schwicht added: “It is fair to say that some of the more sophisticated institutions have been embracing this concept quite thoroughly.”
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