GERMANY - Core property markets such as Germany will buck the global negative trend for the asset class in 2012, according to Henderson Global Investors.
The UK investment group said investors would focus mainly on Germany and Sweden in a year when the European debt crisis would continue to unsettle markets.
Other core countries included Austria, Finland, France, the Netherlands, Poland and the UK, Henderson said.
For core countries, the asset manager anticipates "stable initial yields" and "top rents" for retail property, with assets in secondary locations alone coming under pressure.
Stefan Wundrak, director of research, said most investors would continue to bet on lower but safer yields in core markets over the next five years, rather than taking chances in Southern Europe.
Meanwhile, Austria's CA Immo said it would also focus on Germany this year, earmarking 80% (€800m) of its investment volume for the country.
Favoured locations include Berlin and Frankfurt, with the shopping centre Skyline Plaza in the Europaviertel in Frankfurt expected to be finalised in 2013.
CA Immo sees major potential in Berlin, as the "comparatively low level of income and rents, a broad mix of industries and a growing service sector" are making the city more attractive as a business location.
However, Bruno Ettenauer, chairman of the board, warned that while Frankfurt remained a "top location", it was "vulnerable" because of its continued strong focus on the banking sector.
"In Berlin, we have an enormous potential for city developments with over 1m square meters in property reserves, and we will make use of this or put it on the market step by step over the next years," he said.
In other news, German real estate company IVG said it was lining up approximately €1.5bn worth of real estate deals for this year, particularly for its institutional investors.
Oliver Zimper, managing director at IVG Asset Management, which responsible for the company's global transaction business, said: "Alongside classic purchases for our special funds investors, we are planning new national and European club deals as follow-on products from the Silver Tower in Frankfurt, which was acquired in 2011 to one of the largest individual transactions in the German real estate market."
He added that IVG would continue to "intensify" its sales programme, both for its fund investors and its own portfolio.
Last year, the real estate company almost tripled its transaction volume year-on-year, with around 130 individual transactions across Europe and a total volume of €2.25bn.