However, KBC Asset Management has adopted a 'fund of funds' approach giving Irish investors exposure to some of the leading markets in Europe without exposing themselves to too much risk.

Diversity is the key to the approach and the KBCAM European Property Fund spreads its investment across a broad range of strategies, regions and sectors, including office, retail and logistics, in mature markets such as Germany and emerging markets in EU accession states.

Historically, Irish pension funds have mostly invested in equities, bonds and, to a lesser extent, domestic property.

But international property allows investors to better manage the risk . . . hence, the new fund is attracting interest from pension funds, charitable bodies and private investors alike.

The benefits of European commercial property are obvious. Yields tend to be anywhere between 75 and 200 points higher than in Ireland or the UK.

Many of the European markets (especially in the newer eastern European markets) still have scope for capital appreciation and yield compression, and many analysts will point to countries such as Poland, Hungary and the Czech Republic as having the greatest growth potential in Europe. These three countries have recorded strong rates of GDP growth in recent years and KBCAM predicts that growth will expand by close to four percent per annum over the next two to three years.

"We blend different types of fund and different specialist property management teams, " says Jean Ryan, investment specialist with KBCAM. "For example, about 40% of the fund is invested in funds that concentrate on what we call 'core investment strategies' . . . funds which invest in high-quality, well-located, prime properties which can be reasonably expected to provide a stable, income-driven rate of return over the long-term as well as having the potential for capital appreciation.

"Alongside these core investments is the 'Satellite Portfolio', and approximately 60% of the fund is invested in a combination of added value and specialist vehicles, " she continued. "These growth-focused funds seek enhanced returns from investment in both mature Eurozone markets as well as emerging central European markets. This Satellite Portfolio also includes exposure to specialist sector and regional funds."

KBCAM is one of Ireland's leading investment management operations, while its international presence allows it to draw on the expertise of its operatives across all the main markets.

"We go through an exhaustive process of analysing the individual property funds and their managers as well as assessing the key properties in which they are invested, " said Ryan. "Having drawn up a shortlist of funds, we then conduct a full due diligence process on each one, including interviews with the individual fund managers, before making the final selection."

This process has resulted in the creation of a 77.1m fund with exposure to 36 assets valued at 1.1bn across 12 different countries through seven different funds.