Investors Look to Expand Retail Portfolios

The amount of money going into retail property has increased as a share of total European commercial-property investment, according to a survey by Jones Lang LaSalle. In 2010, the retail sector accounted for 28% of total commercial-property investment, up from 21% in 2006. Investment in offices accounted for 49% of total commercial-property investment in 2010, down from 53% in 2006.
Allianz Real Estate, a unit of German insurer Allianz SE, is telling investors in roadshows that it plans to invest about €11 billion ($15 billion) in European property, aiming to take its portfolio to €30 billion. Allianz Real Estate, which is looking for yields of between 5% and 6%, wants to have about 45% of its portfolio in offices, 25% in retail and 15% in residential. Offices account for 63% of Allianz's portfolio, residential is 20%, and retail is about 17%, according to Allianz Real Estate.
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Many investors are looking for a safe place to put their money with the wild fluctuations in the financial market. Stable, predictable investment vehicles are increasingly hard to find, but smart investors do have choices. One of the better choices is to invest in single-tenant, net leased properties, which many investors also call a corporate bond combined with real estate investments that still make sense today.