There was a substantial increase in sales by insurance companies in the fourth quarter to a record level of over £6 billion (), while pension funds sales of property also increased to £971 million. Insurance company property purchases eased back to £3.6 billion whilst pension funds bought nearly £1.4 billion worth of property.
Greg Nicholson, Head of Investment at CB Hillier Parker, said: "Despite the substantial withdrawal of money by UK Insurance Companies in the final three months of last year, 2002 was a moderately good year for the UK commercial property investment market, with real returns of around 7%. Property's security of income would have attracted a far greater weight of money from the Institutions, but as the equity market slide gathered momentum, many funds were hamstrung by an above-target property weighting.
"Looking forward, 2003 is likely to be a year of treading water as far as Institutional property funds are concerned. The ongoing equity issue, weak occupational markets and high transaction costs mean that many funds will seek to actively manage existing portfolios, with selective purchases to reposition current sector weightings."
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