MS Map and Esate Agents

Invista sees 5-10 percent European property fall

LONDON (Reuters) - Property funds firm Invista Real Estate says commercial property prices in mainland Europe will fall by an average 5-10 percent this year and probably by more in Madrid and Barcelona.

In an interview on Friday, Tony Smedley, who heads Invista's stable of continental European funds, said property valuations were unlikely to tumble on the mainland as much as they had done in the UK, but they had nonetheless begun to adjust downwards.

"My sense is that valuations have come off a bit but there haven't been the transactions to evidence that," Smedley said.

He said there was scope for commercial buildings such as offices, malls, and industrial warehouses to fall by 5-7 percent in Germany, regional France, Belgium and the Netherlands, by 8-10 percent in Paris, and by more than 10 percent in Spain.

Average commercial property valuations in the UK are already down almost 17 percent from their peak last summer but the extent of the post-credit crunch real estate correction in the rest of Europe is less clear.

Invista is majority owned by UK mortgage bank HBOS (HBOS.L: Quote, Profile, Research) and has 8.7 billion pounds in assets under management.

Smedley said about 1.5 billion euros (1.2 billion pounds) was invested in continental Europe, with two-thirds of that in France and around half in the Invista European Real Estate Trust (IERE.L: Quote, Profile, Research).

REFINANCING

He said the Trust was negotiating with several banks to bring forward the refinancing of a 460 million euro credit facility with HBOS-owned Bank of Scotland which was due to expire in December.