Goodman International Limited, a global group administering logistics real estate, has just published a report on real estate investment risks worldwide.

The Goodman Global Risk Indicator (GGRI) rates the level of risk in Poland as medium and predicts that it will decrease over time. The GGRI was introduced to supplement the Capital Asset Pricing Model (CAPM) which assesses risk using a quantitative model. The GGRI qualitatively assesses market conditions and allows for a broader risk appraisal. The GGRI analyzes the world's 33 most important markets in terms of economic, socio-political and real estate risk.

The company expects the GGRI to fall in all three categories in Poland but to hover around the medium until 2011. Forecasts for the Czech Republic, Slovakia and Hungary are similar.

The report rates Poland, the Czech Republic, Hungary and Slovakia as the most economically advanced countries in Central Europe, and their plans to join the euro zone may attract even more foreign investment. The biggest threat facing these states is a return to the foreign currency instability of the early 1990s. This would delay their admission to the euro zone and encourage central banks to raise interest rates.

By comparison, the report rates this year's level of investment risk in Romania and Bulgaria as high. Risk in these countries is expected to fall to medium by 2011, mainly as a consequence of their recent accession to the European Union. Ukraine and Turkey, on the other hand, promise high real estate profits but also high risk linked with their unstable political situations.

The report expects Western Europe's low level of risk to remain stable over the next five years. The largest countries, such as Britain, France and Germany, have diversified economies and are less dependent on foreign trade than are most Asian states. From an investor's standpoint, Britain offers the lowest real estate risks in Europe and this is expected to continue until at least 2011.

The report expects risks to continue to fall over the next five years, especially in developing countries like Poland. Goodman estimates that as many as a third of the world's 30 best investment conurbations will be located in China by 2020. This may make the country one of the world's major real estate markets, along with the United States, Japan and Britain.

The report says that investment on the global real estate market has been expanding rapidly over recent years and stands at a record $682 billion. International and inter-regional real estate investment keeps rising. Goodman expects the real estate market to remain competitive over the next 12 months despite the worldwide drop in economic growth and deems it a good way to diversify an investment portfolio.