IPD: Austrian Commercial property returns remain robust (AT)

The Austrian All Property total return for 2007 was 6.8%. This return is the highest posted since the beginning of the index and constitutes an increase of 10 basis points on 2006. Property performance far outstripped both bonds and equities which earned investors 1.5% and -7.4% respectively.

For the fourth consecutive year, retail was the strongest commercial property sector with total returns of 7.4%, a decline of 140 basis points on 2006. Other commercial properties remained in second place with returns of 7.0% in 2007 compared with 5.9% in the preceding year. This segment includes mixed-use properties and social housing where rental growth is restricted by government statute.

The residential market saw returns increase by 20 basis points to 7.1% in 2007, largely spurred by a slight up-tick in capital growth. Although office sector total returns increased by 90 basis points on the year before, hitting 6.1%, it remained the worst performer. Director of IPD, Dr. Nassos Manginas said, "In 2007, we saw a further rise in total returns of the Austrian index generating an annualised rate of returns of 6.4% over the last three years. The retail and the residential sectors have been the main contributors to this pattern with a performance of 7.9% and 6.7% respectively between 2005 and 2007."

Source: IPD

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