Despite falling confidence in the future of the European currency, cross border European funds continued their recovery from the downturn of 2008/9 by delivering an investor return of 4.1% in 2011, according to new data released on Wednesday by the Investment Property Databank.
Despite falling confidence in the future of the European currency, cross border European funds continued their recovery from the downturn of 2008/9 by delivering an investor return of 4.1% in 2011, according to new data released on Wednesday by the Investment Property Databank.
This was the second year of positive returns, and although lower than the UK pooled fund index (at 7.1%), and the US NCREIF ODCE fund markets (at 16.0%), this reflects the greater long term stability of the pan European funds, driven by geographic diversification, a high income return of 6.5%, and low exposure to volatile markets such as the UK.
The IPD index also reports quarterly results for the first time for a Pan European sample, both at the fund NAV (Net Asset Value) level, and the direct level (based on the underlying valuation of properties within the participating funds). The underlying direct real estate performance for Q4 2011 was 1.7% with an overall end investor return of 0.9% at the NAV level.
'This new index and the data behind it offers a huge step forward in the level of detail available for managers and investors alike, helping us to better understand European real estate performance,' said Doug Rowlands, head of Multinational Services at IPD.
Simon Mallinson, director of European Research at Invesco Real Estate, added 'Investors are increasingly asking for ways to compare and contrast manager performance and strategy and this index will allow this, as well as delivering a better set of tools for fund managers to understand how to improve performance and mitigate risk.'
