First State’s Nicholas tips US retail property

First State’s Nicholas tips US retail property
News from FT Adviser:

The manager of the £82m Global Property Securities fund said that general growth in rents was being undermined by the negative newsflow emanating from Europe. However, he tipped commercial and retail property in the US to continue to perform strongly.

Mr Nicholas said: “In spite of the crisis in the eurozone, the picture across Europe is mixed. Demand for German residential property and all sectors in Switzerland remains high. However, city markets such as Paris and Amsterdam are under pressure.

“The outlook is improving in the US. Apartments is the best performing area of the commercial property sector due to strong rental demand. Good performance has also come from shopping centres focused on higher-end tenants.

“The negative economic backdrop is undermining rental growth, banks are reluctant to provide finance and real estate markets are generally sluggish. On the positive side, development pipelines are limited and in some markets rents are increasing slightly.”

In spite of his bullish US outlook, Mr Nicholas said he was maintaining an underweight position in the US market overall, or 61 per cent at the start of this year. He is also underweight Japan and the UK, on 3.9 per cent and 4.6 per cent, the latter partly driven by a decline in demand in London.

“London’s commercial property sector is still in relatively good health, alt…………… continues on FT Adviser

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