The retail sector will offer the best opportunities for property investments in Australia this year, according to LaSalle Investment Management.
Although the headline retail figures have been weak, there are still pockets in the sector that show attractive value, including food and pharmaceutical retail.
"We still favour non-discretionary spending, so, for example, supermarket-based shopping centres," LaSalle research and strategy associate director Alexandra Gray said yesterday.
Gray joined LaSalle last month from Lend Lease, where she was a research manager.
LaSalle Asian strategist Paul Guest added that the relatively lower real estate prices made it an attractive part of the sector.
"We are not banking on massive rental growth. It is about attractive entry prices, which give you core-type returns," Guest said.
The outlook for residential property was also good, he said.
"Residential developments requiring mezzanine debt in cities like Sydney and Brisbane offer attractive returns, where fundamentals are supportive of residential demand," he said.
LaSalle yesterday presented its Investment Strategy Annual 2012, in which it gave an outlook for global real estate markets over the next 12 months.
The investment manager said the lack of bank finance for projects would leave the best opportunities for investors with liquidity of their own.
"Our long-term view is that real estate is now a global asset class, as are stocks, bonds and other forms of private equity," LaSalle global strategist Jacques Gordon said.
"Seeking huge risk premiums in cross-border markets leads to the type of problems that were made painfully evident during the global financial crisis.
"Compared to last year, we have up-weighted our tilt to both core and value-add investing in North America relative to Europe.
"Europe will be a trickier market to navigate in 2012 due to concerns about the future of the euro and the likelihood of a European recession."
