Demand for property is good news for NAMA
LET'S hope we can avoid another bubble but, according to one investment specialist, the global economy is at the start of a multi-year upturn in commercial property.
It's all a question of sentiment. Anne Breen, Head of Real Estate Research at Standard Life, pointed out to Dublin analysts that the difference in the yields from UK property and the puny ones on government bonds is the biggest ever recorded. Investors are losing their fear about the property market, and are increasingly nervous about what will happen to bond prices as the Fed cuts back on its purchases.
So far, it has been mainly the high-risk hedgies and vultures picking over the spoils -- especially in Ireland. Ms Breen thinks more cautious institutional investors like pension funds are ready to follow.
In Britain, which had a price boom but not a construction one, good space is in short supply. Cities as far from London as Newcastle are feeling the benefit as firms look for more space and longer leases.
It will all be music to the ears of NAMA, which has picked most of the famous low-hanging fruit, especially in the UK, and looks more and more like a giant developer in Ireland. Yields here are even better than in Britain. A bit more good news from the economy could turn quite a few sows' ears into at least respectable purses.