Invista Real Estate Investment Management has said it plans to launch a £1 bn (EUR 1.5 bn) fund to acquire properties from private investors who bought into an overheated commercial real estate market as it was reaching its peak. With prices predicted to slide, Invista hopes to capitalise on such investors feeling the need to sell more quickly than they had planned to avoid falling into a possible negative equity trap. Invista is the largest listed real estate fund management group in the UK, with both commercial and residential assets across the UK and continental Europe.
Invista Real Estate Investment Management has said it plans to launch a £1 bn (EUR 1.5 bn) fund to acquire properties from private investors who bought into an overheated commercial real estate market as it was reaching its peak. With prices predicted to slide, Invista hopes to capitalise on such investors feeling the need to sell more quickly than they had planned to avoid falling into a possible negative equity trap. Invista is the largest listed real estate fund management group in the UK, with both commercial and residential assets across the UK and continental Europe.
With UK interest rates at their highest for years, many private investors and investor syndicates may be unable or unwilling to pay the higher costs of financing their investment when they see property values falling. Invista said it believes the sales from these investors will create a substantial market in 2008 and 2009. The launch of the fund comes just a few days after Standard Life, another large UK property fund manager, cut the value of some of its biggest funds by 6.7% in response to falling valuations. Commercial real estate agents have also been reporting increases in transactional yields due to rising interest rates.
