French SIICs shine, Danes disappoint

Societe de La Tour Eiffel beat all other European property companies in the third quarter of 2006, according to LaSalle Investment Management's quarterly review and outlook report on European Real Estate Securities.

Tour Eiffel led the field as it and other French real estate investment vehicles (known as SIICs in France) produced the most attractive returns in this period. The company, which acquires and builds properties in France and other region of France to lease them, rose strongly in the rankings on the news that the management intended to increase it stake to above 10%.

Citing figures from Bloomberg, LaSalle Investment Management said Tour Eiffel achieved total returns of 38.1% for the third quarter, with monthly performances of 8.11% in July, 5.30% in August and 21.28% in September. Britain's Town Centres Securities was the second best, with total returns of 33%. France's Klepierre was third with 30.4%, followed by the UK largest listed residential property owner Grainger Trust on 26.9%. Eurocommercial Properties, a Netherlands-based company, was fifth with total returns for the third quarter of 24.3%.

For the second quarter in a row, Danish property companies were among the worst relative performers, the report said. Nordicom, Keops and Sjaelso Gruppen fell respectively by -23.9%, -16% and -10%. Colonia real Estate (-16.9%) and Pirelli Real Estate (-10.5%) were in second and fourth place in the bottom group.

Viewed collectively, European listed property produced strong returns in the third quarter of this year. The EPRA Total Return index rose 12.8% and strongly outperformed bonds and the broader equity markets. 'Combining our expectation for attractive earnings growth and steady-to-falling investor yield requirements, we are confident in expecting attractive returns from European property securities of 8-10% per annum over the next three years,' LaSalle Investment Management said.