UK - The Real Estate Investment Trust Association (Reita) has become the latest industry body to forecast a mid-year pick-up in the UK property market.

The UK REITS advocacy body forecast a mid-year "stabilisation" and a "gradual recovery" in the second half of the year. Despite UK Reits still trading at a 20% discount, the body claimed the lag between investment in property share prices and underlying property trends suggested the market had already bottomed out at the end of last year.

It pointed to a slowing decline in commercial property's capital values. By mid-2008 direct real estate values will stop falling, claimed Dave Butler, head of external affairs at Reita.

"Liquidity is looking for a long-term home and seeing value," he said. "Enough funds have been launched to suggest the money is out there." However, the build-up of funds' assets over relatively long periods could point to an earlier - rather than recovering - appetite for property assets.

Butler acknowledged transaction volumes were down from last year. But he denied the lauded presence of foreign buyers in the market amounted to an international spending spree by sovereign wealth funds.

"Liquidity isn't just from sovereign wealth funds," said Butler. "They aren't the sole players. There are plenty of other players, including pension funds."

Participants in an IPD panel last week issued a more cautious forecast for market recovery.

Robin Goodchild, European director of strategy and research at Lasalle Investment Management, said although good-quality assets are close to the floor, "for  secondary ones there's a bit more pain to come"

Likewise, derivatives champion IPD director Ian Cullen said some derivatives investors "don't believe we've hit the bottom yet".

In the meantime, opportunistic investors would likely continue to find value, according to Goodchild. "Vulture funds are being launched on a daily basis by people we've never heard of," he said.

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