'Germany favoured over medium term,' says Invista

Germany, together with other less risky property markets, is best positioned to deliver attractive risk-adjusted performance over the medium term as investors re-assess their attitudes towards property pricing and risk, according to the latest research published by Invista REIM. The report, which provides a reassessment of risk-adjusted performance prospects over the next five years, shows that property investors are urged to look beyond volatile short term data and take a medium term view of market performance.

Invista favours markets such as Germany, Italy, Benelux and France, in which diversified investment opportunities remain and where returns can be enhanced over the medium term through active asset management. By contrast, small, less liquid property markets, such as Portugal and Hungary, with higher levels of expected pricing volatility, fell in the rankings, as did previous economic outperformers including Spain and Ireland, which are expected to experience an exaggerated slowdown in economic growth over the next five years. Changes to the ranking since 2007 reflect higher economic and capital markets related risk created by the global credit crunch.

Tim Francis, head of Continental European Research at Invista, said: 'The global economic events of the last 12 months have forced investors to reassess their attitudes towards property risk and pricing. Despite recent weak economic data, we believe the German property market should consolidate its position as a key investment target for diversified investors.'