LaSalle Investment Management has released research today saying a recovery in the global economy is likely to be the key driver for property stocks in the next two years.
According to Global Insight, LaSalle's source for economic forecast data, global GDP is expected to rise 3.2% this year and 3.4% next year.
The US is expected to recover strongly, while in most European countries, recovery is likely to be more muted as the recession was more muted there.
LaSalle said it expects earnings of the global real estate companies in its investment universe to fall around 4% in 2010, with the weakest earnings from US REITs.
In 2011, the earnings of US companies should grow, which will increase earnings in LaSalle's universe to 4% in 2011, with stronger growth in 2012 and 2013.
Ernst Jan de Leeuw, head of European Securities at LaSalle Investment Management says the availability of capital will be another key driver for the property sector this year and next.
He said 2009 was a good year for capital raising with more than $50bn raised by public real estate companies in equity and rated debt.
"Capital markets continue to be receptive to the offerings of global real estate companies, particularly the US debt market, but with capital raises throughout the world," he said.
"More than $5bn in rated debt has been raised thus far in 2010, along with more than $1.5bn in equity raised by public real estate companies in the US , the UK , Switzerland , Austria , and Japan .
"LaSalle expects this trend will continue through 2011 and beyond, with variations among regions."