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Property Returns In For A Repeat Performance In 2002, Forecasts King Sturge

LONDON-Property outperformed both UK equities and Government bonds during 2001 according to King Sturge, and the firm expects returns from property to remain broadly similar in the coming year.

By Graham Parker | Updated on January 09, 2002

LONDON-Despite the slowdown in the office and industrial markets, agent King Sturge expects total returns from commercial property over 2002 to be broadly in line with the 7% return achieved in 2001. Last year Government bonds only returned 6.8% and equities -12.4%, and property has now outperformed gilts and equities on a three-year annualised basis.

King Sturge Investment Partner Richard Batten said ‘Institutions are having greater confidence in property as an accepted asset class. ‘ And he expects to see weightings in the sector increase.

However, institutions will have to compete with debt-driven purchasers for stock. With interest rates down to 4% and property showing average returns of 7% to 8%, many forms of property acquisition are now self-financing, Batten noted.

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