Widows Wary About Eastern Europe

LONDON -- The real estate arm of Scottish Widows Investment Partnership, or SWIP, plans to launch its debut far eastern fund in 2008 and has temporarily ruled out investment in eastern Europe, its new property head said.

Malcolm Naish said in an interview that some East European property markets still harbored risks that were not sufficiently factored into current prices.

But far eastern property markets -- so far broadly untainted by U.S subprime convulsions -- had attractive growth prospects and little performance correlation to British real estate.

"I am concerned some emerging European markets are now being priced as western European markets when there are still issues to resolve such as title, planning systems, supply and transparency," said Naish, in his first interview since joining the asset management arm of Lloyds TSB Group last month.

"I wonder whether the reward for the risk is quite in balance," he said.