Threadneedle looks to European expansion - commercial mortgages

09 March 2007

Property management group Threadneedle is setting its sights on expansion in European markets following growth in the UK commercial property market.

One of the biggest property mangers in Britain, Threadneedle currently has some £7 billion worth of real estate assets, making it an attractive group for investors, including those with commercial mortgages.

It has been announced that the group is currently looking for growth in France, Germany and the US, potentially extending wider opportunity for commercial mortgages abroad. Statistics from Property Data indicate that over £61 billion worth of commercial property transactions were made in the UK last year, suggesting healthy activity in the commercial mortgages sector.

In addition, property covered by the IPD annual index has been valued at £192 billion, thought to represent half of the total commercial property stock. Despite these developments Don Jordison of Threadneedle puts the growth potential of the property derivatives market under question.

"Property isn''t very volatile, and it''s very difficult to get a derivatives market going off a market with little underlying volatility," he explained to Reuters.

"It''s a fraction of the total market and derivatives are generally a multiple."

Threadneedle last month launched its first retail property fund.