UK/GLOBAL - The UK's real estate market is predicted to be among the first to exit the economic downturn ahead of more volatile markets, according to analysts' speaking at the Barcelona Meeting Point this week.

Although falling rents are predicted for 2009 and yields are expected to reach more sustainable levels, experts believes the UK's real estate market will be one of the first to recover.

Maurizio Grilli, group analyst for Grosvenor in London, said: "We think the UK is exiting the tunnel. It has problems but I think next year we will se a different situation. After the UK, we think we will see more volatility in [real estate] markets such as France and Spain."

Real estate markets in Germany, Brussels and Amsterdam are also likely to take longer to recover because they were slower to react to the crisis in the first place, claimed Grilli.

Perhaps more importantly, officials believe UK pension funds in particular will return to the real estate market as soon as the stock market begins to climb.

Roger Cooke, manager partner in Spain for Cushman and Wakefield, said: "We think that the pension funds in the UK will come back into the market. It is very important to them how they allocate their assets to real estate. If the stock market comes back up they will have money to invest."

German and Arab investors will continue to be of key importance to investors while sovereign wealth funds are likely to hold their weight according to Cooke.

Commenting on whether investors would consider investing in global funds, Alessandro Bronda, head of investment strategy for Aberdeen Property Investors, said: "Serious investors invest for the long-term and real estate as an asset class has not lost its merits. I think our sector has a fantastic future.

"We know that pricing is falling but we know that it will be cheaper to buy after tomorrow. There is a lot of equity ready to be deployed," he added.

Scandinavian countries are also expected to perform well in the future, according to analysts, and Finland is predicted to deliver the highest returns.

Grilli believes returns are likely to be high across recovering markets but insisted timing was going to be a very important factor for investors deciding to re-enter the market.

"We think that entering the market a bit before the fall will be a good move. This might mean that entering the markets in 2009 could be a good idea," he said.

The office sector is also predicted to be one of the first property types to recover.

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