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Global Property Securities: Some Markets Offer Attractive Buying Opportunities
Until the onset of the current credit crisis, global real estate securities had enjoyed a long period of great absolute performance as well as relative performance vis-à-vis other asset classes, including global equities, global bonds and U.S.-only REIT portfolios. The FTSE EPRA/NAREIT Global Real Estate Index delivered annual returns of 17.9 percent and 12.0 percent over five-year and 10-year periods, respectively, ending in June 2007. Market capitalization of global property equity securities more than quadrupled from less than $200 billion in the early 1990s to more than $800 billion by third quarter 2007.
However, since the onset of the credit malaise, property securities around the world have declined precipitously, opening up opportunities for investors again. While real estate fundamentals are slowing, they remain healthy in many parts of the world, especially in parts of continental Europe, western Canada and much of Asia. Furthermore, shares are now pricing in a doo