Returns from property are falling but are still on course to produce a return of 6%-8% for the year,...
Returns from property are falling but are still on course to produce a return of 6%-8% for the year, according to specialists Baring, Houston & Saunders.
Ian Whittock, director for research and forecasting at the group, said 2001 is likely to be the low point of the present cycle.
He added: 'The last time we were at the bottom of the cycle returns were as low as 8.4%pa. These forecast returns should still leave property ahead of the prospective performance from stocks and bonds. We take some comfort from that. If this is as bad as it gets, we can live with it.'
While returns from property have been falling they remain comfortably positive at 8.8% for the 12 months to the end of April and 2.4% for the first four months of the calendar year, according to the latest UK Property Report by Baring, Houston & Saunders.
Whittock said that last year the combination of active management and development added a total of 0.9% to total returns in aggregate. He said next year's figure is certain to be lower than this, which would leave returns dependent largely on rental growth and income return. By contrast the FTSE All-Share is down 2.9% over the 12 months to the end of June 2001.
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