Some investors seeking to benefit from the global boom in real estate are going to make “huge mistakes” by failing to differentiate between prime and secondary properties, said John Carrafiell, co-head of real estate at Morgan Stanley.

The search for yield will result in investors making mistakes buying weak properties in weak markets, Mr. Carrafiell told delegates yesterday at MIPIM, the world’s largest real-estate conference at Cannes in southern France.

“People will end up in tears in a lot of the deals they are doing today,” Mr. Carrafiell said. “People are going to make huge mistakes.”

Mr. Carrafiell’s comments came as brokerages Jones Lang LaSalle and CB Richard Ellis Group both reported record levels of investment in 2005. Global investment in shops,offices,and industrial properties rose 21% to $475 billion last year, with an additional $120 billion spent buying multi-let residential apartment blocks, Jones Lang said at MIPIM yesterday.

The people who would make mistakes were those who didn’t know enough about what they were buying, Mr. Carrafiell, who has been based in London since 1989, said in an interview.

Mr. Carrafiell, 41, pointed to the number to property companies that have gone public in London since the start of last year. He declined to be more specific.

Almost 30 companies trading in London have sold shares to investors since the start of 2005, with about a third planning to invest in former communist Europe.