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18th European Real Estate Society (ERES) ConferenceEindhovenJune 2011
Graeme NewellUniversity of Western Sydney
Stanley McGreal, Martin Haran, Michael McCordUniversity of Ulster
Contact author: [email protected]
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INTRODUCTIONINTRODUCTION
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PURPOSE OF THE PAPERPURPOSE OF THE PAPER
Eleven (11) major European direct property markets – 10 yrs (2001-2010)
Risk-adjusted performance
Portfolio diversification
Mixed-asset portfolios
Property investment implications
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GLOBAL COMPETITIVENESS
♯1. Switzerland ♯2. Sweden ♯5. Germany
♯7. Finland ♯8. Netherlands ♯9. Denmark
♯12. UK ♯14. Norway ♯15. France
♯18. Austria ♯19. Belgium ♯20. Luxemburg
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CORRUPTION CORRUPTION PERCEPTIONPERCEPTION
♯1. Denmark ♯4. Finland ♯4. Sweden
♯7. Netherlands ♯8. Switzerland ♯10. Norway
♯11. Luxemburg ♯14. Ireland ♯15. Austria
♯15. Germany ♯20. UK ♯22. Belgium
♯25. France
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INSTITUTIONAL GRADE INSTITUTIONAL GRADE PROPERTY MARKETPROPERTY MARKET
♯3. Germany ♯4. UK ♯5. France
♯7. Italy ♯8. Spain ♯11. Russia
♯14. Netherlands ♯16. Switzerland ♯17. Belguim
♯18. Turkey ♯19. Sweden ♯21. Norway
♯22. Austria ♯24. Poland ♯26. Denmark
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PROPERTY TRANSPARENCYPROPERTY TRANSPARENCY
♯3. UK ♯4. Sweden ♯7. Ireland
♯8. France ♯9. Netherlands ♯10. Germany
♯11. Belgium ♯12. Denmark ♯13. Finland
♯14. Spain ♯15. Austria ♯17. Norway
♯19. Portugal ♯20. Switzerland ♯21. Italy
♯22. Poland ♯24. Czech Rep. ♯27. Hungary
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MAJOR PROPERTY FUND MAJOR PROPERTY FUND MANAGERS: EUROPE EXPOSUREMANAGERS: EUROPE EXPOSURE
ING: 39% UBS: 54% RREEF: 45%
Morgan Stanley:
35%
JP Morgan: 10% Pramerica : 21%
LaSalle: 34% Aberdeen: 97% AEW: 67%
CB Richard Ellis:
38%
Cornerstone: 20% Tishman Speyer: 17%
Heitman: 16% PruPIM: 86% Hines: 20%
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SECURITISED PROPERTYSECURITISED PROPERTY
♯7. France ♯8. UK ♯11. Sweden
♯18. Germany ♯20. Netherlands
REITsREITs
♯3. France ♯4. UK ♯8. Netherlands
♯10. Belgium ♯13. Turkey ♯16. Germany
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PROPERTY ACTIVITY: 2010: PROPERTY ACTIVITY: 2010: COUNTRIESCOUNTRIES
♯3. UK ♯4. Germany ♯6. France
♯11. Sweden ♯13. Russia ♯14. Spain
♯17. Netherlands ♯19. Italy ♯21. Poland
♯22. Norway ♯23. Finland ♯24. Turkey
EUROPE: $154B @ 24% global
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PROPERTY ACTIVITY: 2010: PROPERTY ACTIVITY: 2010: CITIESCITIES
♯1. London ♯4. Paris ♯10. Stockholm
♯15. Moscow ♯21. Berlin ♯23. Frankfurt
INDIVIDUAL TRANSACTIONS: 2010INDIVIDUAL TRANSACTIONS: 2010
♯4. London ♯5. London ♯7. London
♯8. Berlin ♯9. London ♯10. Frankfurt
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PROPERTY ACTIVITY: Q1 2011PROPERTY ACTIVITY: Q1 2011
♯3. UK ♯5. Germany ♯7. France
♯11. Sweden ♯12. Italy ♯13. Poland
♯16. Spain ♯17. Netherlands ♯19. Czech Rep.
♯21. Austria ♯22. Belgium ♯23. Turkey
EUROPE: $44B @ 24% global
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METHODOLOGYMETHODOLOGY
* Denmark * Finland * France
* Germany * Ireland * Netherlands
* Norway * Portugal * Spain
* Sweden * UK * Pan-European
EUROPEAN DIRECT PROPERTY MARKETS : 11 COUNTRIES
Direct Property: IPD Total Returns
*All Property •Retail *Office *Industrial
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METHODOLOGY
Stocks (FTSE Indices) Bonds (10Y Government Bonds)
2001-2010 :annual
Risk-adjusted performance, portfolio diversification
European property markets omitted : 6
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DIRECT PROPERTY: IPD 2010DIRECT PROPERTY: IPD 2010
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DENMARK ASSET PERFORMANCE (2001-2010)
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FRANCE ASSET PERFORMANCE
(2001-2010)
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SPAIN ASSET PERFORMANCE (2001-2010)
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UK ASSET PERFORMANCE (2001-2010)
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PROPERTY PERFORMANCE: PROPERTY PERFORMANCE: 20102010
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STOCK PERFORMANCE: 2010
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PROPERTY PERFORMANCE: PROPERTY PERFORMANCE: 2001-20102001-2010
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STOCK PERFORMANCESTOCK PERFORMANCE
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PORTFOLIO DIVERSIFICATIONPORTFOLIO DIVERSIFICATION
Within Sector
Within Country
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DIVERSIFICATION: PROPERTYDIVERSIFICATION: PROPERTY
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DIVERSIFICATION: STOCKSDIVERSIFICATION: STOCKS
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UK DIVERSIFICATIONUK DIVERSIFICATION
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FRANCE DIVERSIFICATIONFRANCE DIVERSIFICATION
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GERMANY DIVERSIFICATIONGERMANY DIVERSIFICATION
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SWEDEN DIVERSIFICATIONSWEDEN DIVERSIFICATION
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SPAIN DIVERSIFICATIONSPAIN DIVERSIFICATION
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PROPERTY/STOCK CORRELATIONS
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PROPERTY/BOND CORRELATIONSPROPERTY/BOND CORRELATIONS
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EUROPEAN PROPERTY INVESTMENT EUROPEAN PROPERTY INVESTMENT IMPLICATIONSIMPLICATIONS
Size; maturity; significance
Risk-Adjusted Returns
Portfolio Diversification* Sectors * Countries
Mixed-Asset Portfolios
Other Property Markets: IPDAustria, Belgium, Czech Rep.Italy, Poland, Switzerland, CEE
International Investor Perspectives