Property

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Property is the collective term for undeveloped and developed land - also called real estate - that forms one of the four major investment asset classes along with equities, debt and cash. Although considered a haven for conservative investors, property in many parts of the world has recently suffered from inflated valuations that have since collapsed disastrously in some markets.

Grounded

Investments in most property are generally considered safe long-term investments because the market in general - like the stock market - tends to rise in value over time, plus rental property investments carry the added value of a predictable revenue stream. Developed real estate, however, carries the disadvantage of being immobile and thus its performance is very closely linked to that of the surrounding economy.^[1] Since most property markets are less liquid than other asset classes, collective investment vehicles like listed real estate investment trusts (REITs) that operate like property mutual funds have recently become popular.^[2]

Hammered

The recent global property bubble that eventually led to the 2007-2008 credit crisis has led to allegations that some property-fund managers had grossly overstated the value of real estate in their funds.^[3] Former UBS Realty Investors LLC managing director Richard Trusz recently stated in a shareholder lawsuit against the manager that he urged the return of fees to institutional investors over excess valuations. The lawsuit alleged that the UBS Trumbull Property Fund LP property trust inflated property valuations in its portfolio by over $100 million in 2007-2008. Meanwhile two of the Middle East's biggest property lenders, Dubai-based corporations Amlak and Tamweel, have been forced to merge under a government-controlled bank following the collapse of a five-year bull market in Emirates property.^[4]