Property investors eye riskier markets

LONDON, April 12 (Reuters) – Property investors are looking to riskier markets such as Spain and emerging Europe as competition for safer prime European commercial real estate pushes up investment volumes and prices, research showed.

Direct investment in prime European commercial property hit 26.7 billion euros ($38.6 billion) in the first quarter, up 26 percent on the year, research by global real estate consultancy CB Richard Ellis (CBG.N) showed on Tuesday.

First-quarter deal volumes in the UK, Germany, and France rose by 18-39 percent. Those in Italy and Central and Eastern Europe rose by 75 percent and 197 percent respectively, while those in the Nordics, Benelux, Iberia, Austria, Greece, Ireland and Switzerland fell by 3-39 percent, CBRE said.

"As was the trend last year, the vast majority of investor demand is targeting core assets and markets, which continues to drive yields further down," CBRE said, noting its all-property yield index was at 5.5 percent, down 26 basis points from 2010.

Source: Reuters