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Guest The_Oldie

Investors Shun `falling Knife' Of Real Estate Stocks

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Guest The_Oldie


``We won't see a sustained recovery until people are confident interest rates are coming down,'' said Andrew Jackson, property investment director at Standard Life Plc's fund unit in Edinburgh. It oversees 14 billion pounds of assets including shops, offices, warehouses and property shares.

Stocks in the U.K. and Spain, the markets that led the boom, have been hurt most in the recent slump. Eight of the 10 laggards in the Bloomberg Europe Real Estate Index in the first half of this year were from those two countries.

``All bets are off for IPOs,'' said Patrick Sumner, head of real estate securities at Henderson Group Plc in London.

The collapse of Vector's IPO may stunt the U.K. real estate investment trust market just six months after it was created. U.K. real estate stocks rose 46 percent in 2006 in anticipation of the introduction of REITs on Jan. 1 this year. They allow companies to pay little or no tax in return for paying out almost all their income as dividends to investors.

``The glory years for property stocks are over,'' said Harm Meijer, an analyst at JPMorgan in London who cut his rating for real estate shares. ``It could last for years.''

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Maybe, but Bloomberg is often a good counter-indicator. When the talking heads at Bloomberg have cottoned on to something, it probably means the trend is over, and the opposite will happen. A few months ago, they were talking $30 oil on Bloomberg.

Here is someone who thinks US Property shares are a buy:


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