European property fund returns hit 7-year peak: IPD

Returns from pan-European property funds hit 3.2% last quarter, their highest since Q2 2007, according to IPD's quarterly index.

The IPD Pan-Europe Quarterly Property Fund Index put annualised returns at 9%, likewise the highest level since 2007. The rise was largely driven by an increase in underlying asset values.

‘While income return remained steady at 1.6% and still comprises the majority of the return, capital value growth made a significant contribution and at 1.2% for the quarter it was the first time values have risen by more than half a percentage point in a single quarter since Q2 2007,’ said vice president Mark Clacy-Jones.

Returns from assets in individual countries saw the UK lead the way, returning 7.2% for Q2. France, Germany and the Netherlands returned between 1.7% and 2.3%.

The index is based on pan-European open-ended funds with a total of 530 assets worth around €12.5 bn.