GLOBAL - Europe accounted for only one of the world's top five-returning property markets, according to the IPD Global Index launched last week.
With the UK and Germany dragging down Europe's overall performance, only Norway counted (fourth) among five best performers.
South Africa led the ranking, with Korea second, followed by New Zealand while Australia ranked fifth.
The global index sample has 30% coverage against a 60% target.
"The UK and Germany contribute a huge weight of capital but they're at the bottom of the spectrum [in terms of returns]," said IPD chairman Ian Cullen.
"It shows how much damage the UK is doing, given the weight of money with an extremely negative return."
He said the evaporation of investor confidence during 2007 had resulted in major year-end differences across the 22 most mature investment markets. The higher-return profile of the global mix had been "boosted hugely" by the apparent resilience of the US and the erosion of all key investor currencies against a strengthening Euro.
"It brought benefits to most investors domiciled outside the Eurozone - even the UK," he said.
Sector-wise, there was "not much to choose between the main property sectors, though particularly outside Europe offices showed most resilience".
Diana Choyleva, an economist at Lombard Street Research, warned of overheating among developing economies outweighing below-trend performance from mature economies.
"Luckily, China cannot afford inflation because of its concern over public unrest," she said.
"The central bank is trying to cool the economy by raising interest rates by what looks to us like a gigantic number of basis points. The sooner China and the rest cool their economies, the better it will be for everyone. All the Fed and others can do is pray for China to rein in the heat as soon as possible," continued Choyleva.
In a panel discussion, Pramerica European research director Peter Hayes said fund managers were now bottom-up investors, with a focus on specific assets rather than at markets.
"That's how fund managers are looking at property," he said.