September 4th, 2009A two-year bear market that ravaged global real estate stocks has petered out and a recovery is already underway in key Asian markets, with the United States and Europe to follow, Cohen & Steers Inc. said on Thursday.
The Asian real estate equities recovery would precede ones in the United States in 2010 and Europe in 2011, the global property stocks investor said at the European Public Real Estate Association's (EPRA) Sept. 3-4 conference in Brussels.
Co-Chairman and Co-Chief Executive Robert Steers said recent months had seen significant and rapid change in the global real estate equities markets as monetary and fiscal stimulus packages helped bring an end to the recession.
"The recapitalisation of listed real estate companies is also progressing well, and together these factors will initiate a new positive return cycle for stocks," he said in a statement.
Global Portfolio Manager Scott Crowe said in the longer term Cohen & Steers believed real estate values would settle at higher levels than were generally expected by the market.
"Net asset values for many real estate stocks are rising, driven by better-than-expected cash flows and improving cap rates," Crowe said.
"Furthermore, companies are starting once again to acquire assets, which should also contribute to value creation."
Cohen & Steers said its research showed the real estate total return cycle would likely comprise three phases, starting with equity recapitalisation.
"The second phase, preceding the final fundamental recovery in markets, will be characterised by significant acquisition opportunities in the United States, the Spanish property market, Germany and France, and to a lesser extent in Asia," it said in a report.
It also said factors that attracted investors to real estate investment trusts - such as competitive total returns, moderate volatility, attractive current income, and low correlations with other asset classes - were starting to materialise.
Courtesy of Reuters
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