REAL ESTATE - Barclays Capital is to launch a European REIT fund based on the EPEU index, targeting investors looking to diversify away from UK property.
The EPEU index tracks 47 mainly large-cap European REITs, mainly in France, Germany and the Netherlands. The firm said the emphasis on large-caps would lower the price volatility of the fund.
Barclays said in a press statement that its Ireland-domiciled European Real Estate Income Fund would also provide investors with exposure to a "wide geographical distribution of underlying properties" in both mature and developing European markets.
Alex Robinson, a director, said the fund would target fund and private client managers, although he also expected some pension fund interest. "There’s no reason why pension funds wouldn’t be looking to expand into shares and REITs – but they tend to like bricks and mortar," he told IPE Real Estate.
The timing of the launch reflects the roll-out of REITs legislation across Europe, notably in Germany. "The outlook for European property currently looks attractive and it is an ideal time to invest," Barclays Capital said in a press statement.
European REITs make up just over 10% of the global total. However, name claims the figure will change because of tax benefits associated with REITs and because "investors appreciate liquidity".