Domestic institutional investors were net sellers of property to the tune of £625 million ($1 billion) during the first half of 2002, and they sold more property than they have bought in three of the last four quarters. Insurance companies and pension funds were net disinvestors in property by £517 million ($810 million) in the second quarter of 2002, the highest level of net disinvestments since quarterly records began in 1983.

Greg Nicholson, Head of Investment at CB Hillier Parker, said: "Institutional investment in property remains surprisingly weak." He said that demand from private and overseas investors, which see property as a safe haven for investment capital, was still driving down property yields. "The security of income offered by property is highly attractive in this uncertain and low growth environment," he said. "As a result of falling yields property is set to out-perform both gilts and equities for the third consecutive year in 2002."

Nicholson said that institutional investors were often outbid by private investors making use of relatively cheap finance to bid aggressively for property, which meant that many had found it difficult to place funds allocated to the property sector into the market.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM Digital Member, you’ll receive:

  • Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.