IPD's Swiss index records high and low returns

The IPD/Wuest & Partner Annual Property Index recorded an all property total return at end-2007 of 7.1%. This a 2.2% increase on the 2006 return of 5.9% and the highest return in the six-year history of the index, the Investment Property Databank (IPD) said on Friday.

Property, the IPD said, outperformed the equity and bond markets in 2007, whcih returned -1.3% and -0.3% respectively.

However, the all property income return recorded in the Swiss index remained at 4.8% in 2007, the lowest income return in the history of the index. Capital growth increased from 1% in 2006 to 2.3% in 2007. The strong performance in 2007 took the three year all property total return to 6.1% year-on-year.

The IPD said that retail was clearly the top performer in 2007, with a total return of 10.0%. Total returns on the other properties and office sectors came in at 7.7% and 6.9% respectively. The worst performing sector was residential in 2007, returning 6% for the year.

The Swiss results are at the low end of the scale when compared to other IPD country indices already released for 2007: South Africa (27.7%), Korea* (26.9%), New Zealand (22.4%), Norway (18.3%), Australia (18.1%), France (17.8%), Canada (16.1%), Sweden (14.9%), Spain (12.5%) Portugal
(12.4%), Finland** (11.3%), Netherlands (11.3%), Denmark (10.2%), Ireland (9.9%). The UK was the worst performer, -3.4%.

Dr. Nassos Manginas, director of business development in Europe said: 'Compared to 2006, the Swiss databank has grown further and reached a market capitalisation of more than CHF 50bn (about EUR 31bn) at the end of 2007. This increases IPD's coverage of the Swiss market by 5% to 44%.'