UK - The Investment Management Association (IMA), trade body to the £3.4trn (€3.99trn) UK fund management industry, and its Performance Category Review Committee (PCRC) have created a new property sector.

The property sector set up by the IMA will include all types of UK authorised funds investing "predominately" in property, including direct property funds and property securities funds.

There has been no definitive property sector listing for property-related funds in the UK asset management industry until now and had to be listed as specialist funds, noted Mona Patel, head of communications for IMA.

"We have always had an interest in the property sector but there have always been problems establishing what the definitions should be," said Patel.

The IMA plans to flag different fund styles in order to help investors identify certain sub-groups of funds, such as property fund-of-funds, direct property funds, property securities funds and hybrid property funds, all of which may cover any geographical region worldwide.

Direct property funds will have to invest a minimum of 60% of their assets directly in property, while property securities funds must invest at least 80% of their assets in property securities.

If a fund has a minimum of 80% in direct property or property securities, but does not exceed the 60% direct property threshold, it will be considered a hybrid property fund.

At the end of September, there were 35 property funds included in the IMA's Specialist sector, representing £10.1bn in assets under management, giving the IMA the minimum number of property funds it needed to start up a property sector, according to Patel.

"[The funds] can elect to go into the sector, but they do not have to," said Patel.

The sector is due to begin recording performance on 1 January 2009, but monitoring will actually start after the first quarter to allow a "grace" period for setting up reporting systems and dealing with any technical points that may arise.

Recently launched property funds that intend on investing directly in physical property will be given a year to assume the new property sector definition into compliance.