Continental Europe to 'perform strongly' in 2007

Continental Europe is expected to perform strongly in 2007, according to the most recent 'Global Vision' report issued by ING Real Estate. Significant improvements in Continental Europe's real estate investment climate are forecast as a result of a recovering economy and healthy real estate market fundamentals.

While the ING RE report envisages increasing capital flows into Europe, yields are expected to continue to re-rate over the medium term. 'Global investors will be swift to take advantage of the yield arbitrage opportunities that Continental Europe presents relative to other regions in the world. Investors should consider reallocating or increasing their exposure to the European real estate markets,' said Ian Whittock, head of European Research and Strategy.

ING RE's analysis shows that capital market trends and yields are likely to deliver attractive risk-adjusted total returns over the next three years in Europe. The flow of capital into real estate has continued unabated, and cross-border investment will continue to play a major role in underpinning current pricing. ING Real Estate has seen an increase in both real estate investment trusts (REITs) and commercial mortgage-backed securities (CMBS), as real estate, both public and private, continues to outperform equity and bond markets in most major markets. 'Because of increased transparency, liquidity and strong performance in recent years, real estate has emerged as a widely accepted asset class and, as a consequence, investors have increased their exposure to real estate,' Maarten van der Spek, managing director of European Research and Strategy Continental Europe said.