Pan-Europe property funds improved in the second quarter, according to MSCI.

The firm recorded an improvement in the three months to June, with pan-European funds returning 0.9%.

The total return compares with the 0.4% recorded in the previous quarter by the IPD Pan-Europe Quarterly Property Fund Index.

The index tracked the performance of 14 funds, with a total value of more than €17bn.

MSCI said the improvement signalled the strengthening of property investment in Europe, with improvement in capital value growth.

Direct asset-level return doubled in the second quarter to 1.07% from 0.5% in first the quarter.

Capital value growth at this level, which had turned negative in the first quarter for the first time in two years, improved to -0.2% from -0.8%.

Income return remained largely unchanged.

Over the 12-month period to June, the index recorded an annualised total return of 6.3%, compared to 10.4% at the end of March.