Portuguese property returns remain stable, says IPD

IPD said that its Portuguese Property Index, Imométrica, returned 12.4% last year, the highest total return since 2002. The figure represents a slight increase on the 12% return reported at the end of 2006. Over full-year 2007, the 12.4% total return on property significantly outperformed bonds which had a total return of 2.4%. Equities however outperformed all property, with total returns of 19.8%. Capital growth rose to 6% in 2007 from 5.4% in 2006, while income return fell from 6.3% in 2006 to 6.1% in 2007. Retail was the best performing sector with a total return of 14.9%, followed by industrial at 10.5% and offices at 8.2%.

'The Imométrica - IPD Portuguese Property index delivered a double-digit total return in 2007, confirming the steady growth trend and attractiveness of the Portuguese investment market. The performance achieved in the short and in the long term confirms property is one of the best performing asset classes in Portugal', said country manager for IPD's service in Portugal, Luis Francisco. 'As in previous years, the retail sector was the market leader in 2007, and in particular shopping centres. However, the stronger performance in 2007 seen in both the office and industrial market should also be noted in comparison with the previous years,' he added.

The IPD Portuguese Property Index is based on a sample of 671 properties from 26 funds covering EUR9.2bn at the end of December 2007.