IPD said its Italian Property Index showed a total return of 9.2% for 2007, an increase of 8.0% compared to the previous year and the second-highest rise in the history of the index. Property far outperformed the bond and equities markets in 2007, which returned 2.0% and -4.7% respectively.
IPD said its Italian Property Index showed a total return of 9.2% for 2007, an increase of 8.0% compared to the previous year and the second-highest rise in the history of the index. Property far outperformed the bond and equities markets in 2007, which returned 2.0% and -4.7% respectively.
In 2007 the income return on All Property remained steady at 5.3%, matching the 2006 level. Capital growth rose to 3.8% compared to 2.6% in the previous year. The total return on All Property for the last three years amounts to 8.7%.
Retail was the top performing main sector in 2007 with a total return of 9.7%, although this was down on the two previous years. The Office sector came second with a total return of 9.1%, followed by Industrials at 9.0%. The weaker performance by Industrials was due to low capital growth (1.9%) over the year, which led to the lowest sector performance despite having the highest income return of 7.0%.
In comparison to other IPD country indices already released for 2007, the Italian results are at the lower end of the group. Norway posted the highest figures in Europe with a 18.3% total return in 2007, while France came second with 17.8%, followed by Sweden (14.9%), Spain (12.5%), Portugal (12.4%), Finland (11.3%), the Netherlands (11.3%), Denmark (10.2%), Ireland (9.9%), and the UK (-3.4%).
'The credit crunch conditioning global financial markets and the uncertainty of the evolution of the Italian economy have only partially affected the Italian property investment sector. In particular the IPD Italian Property Index shows some signals of recovery in the performance of the Office sector, which is still driving the All Property returns and represents 45.8% of the IPD Italian Database sample. On the other hand, Retail and Industrials have reported weaker total returns mainly linked to significantly lower rental values', said Davide Manstretta, head of IPD's Italian service.
The total value of the 1,225 properties covered by the IPD Italian Databank is EUR 17bn.
