Thursday, July 24 , 2008 Print

Market Views & Strategies

Select a Section to go to: Property Investment Market PanInvestors Strategy PanInvestors Investment Process

Property Investment Market

More and more investors, mainly institutional are adding international investment property to their portfolios. It is a fact that Property Investments change the way we think about financial planning. The rise in property investing in recent years has been a product of interest rates and stock market returns being low. Across the western world, property assets have become much more institutionalized as fund management has expanded, family and government property ownership diminished, and cross -border capital flows have skyrocketed.

Based on a Financial Times report, institutional property investment market in Central and Eastern Europe (CEE) witnessed another record-breaking year in 2006 as transaction activity broke the €10bn barrier. This represents by far the largest annual total to date, 77% higher than in 2005. Overall, 2006 investment equates to 43% of total investment in the region since 1999. The total amount of money invested into Central and Eastern Europe institutional property markets and mostly in new EU member states of the region is now just over €24bn.

Given that most investment markets in the CEE and in other new EU member states are only scratching the surface of their full potential, investment activity is expected to grow significantly. Continued development activity boosting the quality and quantity of stock available, improved transparency and more stable pricing, provide a sound basis for further growth in investment volumes in coming years. New Europe offers immense opportunities in property investments
br> The expansion of the European Union is the single biggest driver of property price inflation across new EU Member states such as Cyprus and other Eastern European countries like Romania, Poland and Bulgaria. EU membership had a consequential macro economic boost in new member states and provided an excellent opportunity for superior returns in the property market.

In Cyprus for instance, another highly promising new EU member, economy continues to grow strongly, demand for property has been increasing by an average of 25% per annum over the last three years.

Consequently, the record year for investment activity in CEE mirrors the trend witnessed throughout the whole of Europe and especially on new member states. Total Pan-European investment for 2006 was about €230bn, an increase of more than 40% on the total in 2005. Therefore, it is not a coincidence that it has recently been suggested by various analysts that the Central Eastern European (CEE) and new Europe property boom is set to make more multi-millionaires than any other property boom in history.