Jim2007 - "Where do you get valuation??? Prices are definitely down from the over inflated prices of the past, but that does not mean that they represent good value. There is no active market and given the over exposure of the banks to property financing of new projects is going to be a challenge. I've already said that I see this REIT as an attempt at alternative financing and I've not seen anything to make me change my opinion."
You are correct, just because something has fallen in price doesn't mean it represents good value. But there is a hell of a difference between price and value. My assessment of value is based on objective measures of valuation (not my opinion). These measures have been aired by others in a previous post within this thread. The basis for your conclusion seems to centre more on your own subjective assessment of the situation. Though you make a fair point about financing and banks, I would be more comfortable placing greater emphasis on objective facts and figures.
I think I know what I don't know - and that includes where Irish commercial property values are going in the next 12 months. But what I do know is that price at which you buy something is the ultimate determinant of the return you get from an asset. The price at which I am buying Irish commercial property at today, would suggest the odds are strongly in my favour over a long time horizon. That's the best I can hope for.
There is crazy situation going on at the moment, whereby buyers of government debt are quite happy to lend money to the Germans at less than 2% p.a. for ten years, who then in turn buy prime real estate in Dublin city centre (one office on Baggot street yielding c. 14% for example). My money is on the Germans to be the ultimate winners of this trade!
On a separate but related (risk) note, your low/medium/high risk portfolios above, you have 34% in bonds in one that is labelled 'low' risk. Again this goes back to what your measure of risk is, but yours seems to be based on historic volatility. Volatility is next to useless as a measure of risk for investors allocating money to prospective investments. How can the risk of an asset be assessed without reference to the value of that asset? It can't. And volatility takes no account of this. To rely on it as your compass is forcing investors to be completely valuation indifferent. Bonds are high risk in the context of the their valuation, but low risk according to the flawed measure of risk the finance industry uses.