Baring Asset Management's Multi Manager Property Fund has increased its exposure to international property, reporting opportunities for growth in the UK look less promising for 2007.
David Coombs, director of multi-manager investments at Baring Asset Management, said: “The UK property market has been so strong in recent years that yields no longer look as attractive. Commercial property had been undervalued for some time but we feel this anomaly has now disappeared and future returns will need to be driven by value added management and rental growth. As a result we are looking elsewhere for growth opportunities.”
According to Baring Asset Management, the German property market looks much like the UK property market did three or four years ago.
Coombs added: “The German commercial property market could benefit from the introduction of the Real Estate Investment Trust (REIT) structure, but even without this the potential for growth is very encouraging. Very strong demand from overseas investors over the past six months seems to support this. Commercial property in France and Spain offers similar opportunities and we have been taking advantage of this in the portfolio for the past six months.”
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