The rebound performance of property investments since the financial crisis has run its course but there are still opportunities for investors, according to IPD.

UK property values are down 32 per cent on levels from before the financial crisis, and the IPD quarterly index figures show property rental values for 2012 fell back into decline for the first time in 18 months. But overall property returns are positive, which is testament to the resilience of the sector, IPD managing director for the UK and Ireland Phil Tily said at the IPD/IPF annual conference in Brighton of investors, fund managers and property advisers.

“There has been a clear shift in confidence, with evidence throughout this year pointing to three key criteria: the weakness in our economy, the sovereign debt crisis, and fiscal retrenchment,” Tily said.

But the population increase and longevity predictions could present opportunities for investors.

“The UK population is projected to increase by more than 10 million by 2035 placing a dramatic need for more homes, schools, roads, hotels and airports,” he said. “These themes focus IPD’s attention on developing services that help our clients adapt to the challenges and opportunities presented by the market.”

More diversity in the debt market and growth in the alternative asset sector are also attractive. Ten year bond yields are down to 1.7 per cent so even the higher priced parts of the market now offer attractive income premium, Tily said. In addition, “yields across our segments have reached a ‘record’ 15 per cent margin, opening up opportunities for investors to edge up the risk curve, searching out pockets of value, hidden gems in the higher yielding parts of the market”.

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