Moderating returns demand driven

Foreign & colonial expects slower property market in 2006, despite still offering between 8%-10%

Property market returns this year are unlikely to match those of 2004 and 2005, warns F&C Property Asset Management. Despite this, Paul Herrington, managing director of F&C Property Asset Management, said consensus forecasts for 2006 are in the 8%-10% range but are being revised upwards due to the strength of investment demand. Overall, the property market had a strong year in 2005, with total returns up 18.8%, as measured by the IPD Monthly Index. "Our in-house estimate for all property returns is 10.6% for 2005, helped by a modest improvement in rental growth and a slight fall in yield...