Reita finds 'signs of life' in UK property market

Half of the UK real estate experts questioned did not detect any deterioration in investor sentiment in the past three months, according to a new survey published by Reita, the property investment and REITs group. The previous Property Investment Perspective (PIP) in November 2008 revealed that more than 80% said they had seen a deterioration in the previous quarter while less than 20% of the experts polled were positive about the market.

Reita said that further optimism was also evident from the latest research with over 58% of the Reita Expert Panel agreeing investors should be encouraged by the success of new equity raising in the sector.

Patrick Sumner, chair of Reita and head of the quarterly review, said: 'The pessimism of the autumn - with the fall of Lehmans fresh in the memory and stock markets crashing everywhere - has abated somewhat. The property investment market is now showing signs of life. True, the big ticket deals are few and far between, the biggest being the £550 mln acquisition of 50% of the Meadowhall shopping centre in Sheffield by London & Stamford from British Land.

'By contrast, however, the auction rooms are full and there is evidence that prices are rising in 2009. This is probably due to a combination of the better quality of lots and the increasingly attractive yield. Allsops reports a fall in the average yield from 8.25% in the second half of 2008 to 7% in 2009 - although the average size of a lot is £3 mln.'

The Reita Expert Panel includes representatives from 24 of the leading property and investment organisations, including some of the largest UK REITs, EPRA, NAREIT and the London Stock Exchange. The panel is surveyed on a quarterly basis about the key issues facing the property investment industry. More than 58% of the panel agreed investors should be ‘encouraged’ by recent equity raising activity, with a quarter saying they were ‘very encouraged’.