European commercial properties may be a bigger money-spinner than UK alternatives, predicts fund manager and commercial property analyst Seven Dials.
As commentators downgrade investment returns from the over-ripe UK market, Seven Dials says the Euro-factors will underpin this fast growing asset class.
Seven Dials is particularly warm on the Nordic region and the Netherlands, where it anticipates domestically-driven growth through 2007 and beyond.
Brett Robinson, chief executive of Seven Dials, says: While Euro-zone economies have lagged the UKs domestic growth, all the signs are that Europe has far more upside growth potential than the UK.
Supportive conditions for domestic demand remain in European economies and they are generally less reliant on US trade than they have been in the past, which will leave their territories better shielded from downside risk than the UK.
“A further bonus for European investors is the current strength of the labour market in Europe, and the potential for further productivity gains.
At a sector level we favour retail and industrial over the office sector they are better placed to pick up from Euro-zone domestic demand, and arent as keenly priced.
Interesting additional economic plays include Ireland and Spain, where high inflation is anticipated and thus high nominal returns, which look attractive when compared against nominal bond yields in the Euro-zone.