Euro zone fears slow investing

LONDON: Businesses and investors globally are preparing for a break-up of the debtriddled euro zone this year, leading many to put their expansion plans on hold and shoring up safe-haven demand for top quality property.

In its Global Outlook for 2012, property consultant DTZ said few were considering the possibility of the crisis being resolved, which would encourage corporations to expand or invest their cash reserves.

“Most are focused on the downside, which assumes a break-up of the euro zone. Few care to focus on the upside potential,” DTZ said.

Concerns over the crisis have affected sentiment in key property markets like London, which has seen developers struggle to attract tenants for their skyscraper projects and top quality office and retail properties sell for high prices.

Property investors, hedge funds and multinational corporations are among parties who have said they are bracing for a break-up of the euro zone.

Forecasting the impact of a break-up, DTZ said Asia Pacific office rents would be hit temporarily, before Europe and the US. The break-up would affect capital values in European property markets severely.

But DTZ said capital values in the US would rise due to the projected tightening of government bond yields, which would steer investors towards prime property assets that offered higher returns. – Reuters