Investor hunger for property remains
PrimePitch/Property Week survey shows half of respondents still optimistic

By Sinead Cruise

Private investors are more optimistic today about property’s prospects than at any time in the last year.

In the latest PrimePitch/Property Week survey, published today, more than three quarters of respondents said they were planning further property investments in the next three months.

Almost half of the investors questioned logged a vote of confidence in terms of business and the economy. Such optimism has more than doubled since the last quarter when the war in Iraq set back industry progress and business confidence. Only 14% said they were pessimistic about the fortunes of the economy over the next three months.

James Tanner, head of property consultancy at online investor forum PrimePitch, said: ‘the appetite for property investment is growing but the needs and wants of private investors are more sophisticated than ever before’.

The faith shown by private investors in retail investment remains consistent. Of the 600 investors surveyed by PrimePitch, more than half believed that capital values in the retail sub sector would perform strongest, a trend identified in pervious surveys.

Nevertheless, investors have expressed a lack of faith in the long awaited office market revival, which the industry expects to begin this year. Like last quarter, more than a third of investors surveyed predicted a fall in office values, and a further 44% expected values to remain static over the quarter, supporting the idea that 2004 will be the year of the occupier, not the landlord.

Despite 78% of respondents expecting to reinvest in property over the next six months, 40% of those questioned believed the average rental income and property value of industrial and office assets would remain static.

Tanner said: ‘Investors are just as keen to secure solid regular income from securely covenanted, well tenanted properties as they are to achieve strong levels of capital growth. Many investors feel that property values have reached a glass ceiling, for the time being at least.’

The status of property as an alternative investment class has risen considerably over the last quarter with 75% of investors claiming stock market levels would have little impact on their property investment plans.

A quarter even stated that they would invest more money in property even if the performance continued to improve over the next three months.