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A major contribution to solving Europe's financial crisis may lie in repackaging distressed property assets into listed vehicles for investors, according to a study conducted by EPRA.

The listed sector body said Europe's financial crisis showed some 'striking' similarities to the US Saving & Loan real estate debt problems of the early 1990s, when the US government created listed REITs to attract capital from institutional and private investors alike. Over a period of eight years, US REITs grew 1,400% to reach a market capitalisation of $162 bn.

'The real estate industry as a whole is Europe's single largest economic sector at EUR 5 tln,' said Philip Charls, CEO of EPRA, speaking at EPRA's annual conference being held in Berlin on Thursday. 'In a time of crisis, when growth and jobs are a top priority for politicians, no other industry can potentially deliver the scale of investment and innovation required over a relatively short period to kick/start our economies.' The real estate industry accounts for roughly 20% of the overall economy.

According to a recent study carried out by EPRA, 'Growing the European listed real estate market', the listed real estate sectors of the UK and eurozone countries combined now make up just over 11% of the total market cap of property stocks globally.

In 1989, before it began its turbo charged growth as part of the solution to the real estate debt Savings & Loan crisis of the early 1990s, the US REITs market was smaller than either the UK or eurozone countries.

The study concluded that the greatest potential for growth in the European listed real estate markets lies in the UK, German, Spanish and Italian markets.

In Germany in particular, the government's recent announcement that it is considering phasing out the creation of open-ended funds creates a vacuum that could well be filled by the listed sector, Charls said.