REAL ESTATE – UK property investment management firm Invista has posted £8.1m (€11.9m) profit before tax for four months’ trading since it demerged from HBOS in September.

In a presentation to investors, Invista CEO Duncan Owen attributed the results, which included a 63% increase in revenues over the previous year, to a combination of fund returns and "innovative new fund structures". The firm closed real estate transactions worth £3.5bn in 2006.

The firm’s €500m Luxembourg-domiciled, London-listed European Real Estate Trust invests across retail, office and logistics, with its main focus on continental Europe.

Although the firm expects European yield compression to slow, it claims to have identified undervalued cities and sectors outside its domestic market.

Rental growth will become "an increasingly important factor in future performance…with fundamentals from increased tenant demand driving returns rather than merely the weight of money driving prices up," he said.

Owen said he expected moderation of capital growth in UK commercial property, with steady inflows from open-ended funds.

A new, listed residential fund will invest primarily in London and the southeast of England with "material co-investment" from the fund manager. The fund has already acquired a €450m seed portfolio.

Invista’s optimism for UK residential is based on an expansion of the private rented sector, strong inward migration, and lower tenant concentration in the short term.

Invista has €9.2bn in assets under management.