API to step up UK investment activities

Aberdeen Property Investors is seeking to step up its UK investment activities with the launch of a UK opportunity fund.

'The UK is the biggest investment market in Europe and right now the most interesting one as well, because the market started to correct itself before the others', said Alessandro Bronda, head of API's Global Investment Strategy, on the third day of the EIRE fair in Milan. 'We are looking to expand our direct and indirect fund products in the UK, including some innovative plans to help international investors to gain access to the market.'

Capital values in the UK are expected to stabilise soon but rents will continue to fall through next year. API’s forecasts indicate that capital values for commercial property will fall by around 60% from peak to trough and that they have fallen already by around 45% from the peak of the market two years ago. Bronda added: 'The prime end of the market is expected to recover much sooner as there are already signs of increased investor activity.'

Bronda believes that Norway also presents a number of opportunities as capital values have fallen sharply in the country since the beginning of 2008. The country boasts a strong economy and a number of wealthy investors which could start injecting liquidity into the market. 'We are seeing signs of increased activity in the Norwegian property market,' Bronda says, pointing to the listed company Norwegian Property's successful share issue of NOK 1.2 bn through the issue of 202 million new shares.

Bronda believes that a revival of the investment market is on its way all across Europe but it will take place in different phases across Europe, with the UK as the frontrunner, continental Europe following in 2010 and CEE and Russia having to wait until 2011 before the investment market picks up again.