Total returns in pan-European property funds reached 13.3% in 2015, according to data from index provider MSCI.
Total returns in pan-European property funds reached 13.3% in 2015, according to data from index provider MSCI.
An even stronger performance of 14% by North America helped lift the total return in global property funds to 13.5% in 2015. This marked the highest return in four years, as indicated in the IPD Global Quarterly Property Fund Index.
The12-month total return at net asset value (NAV) of 13.5% at the end of 2015 was an increase from 12% in 2014. Data also showed that the IPD Global Property Fund Index significantly outperformed other asset classes; namely; bonds, which achieved a total return at NAV of 1.6%; equities at NAV of 2.6%; and properties equities, which returned 3.7%.
'In addition to offering the highest return in four years, Global Property Fund outperformed other asset classes for the first time since 2011,' noted Ken Greguski, executive director, MSCI. 'This is a result of uncertainty with economic conditions in many parts of the world, which impacted the equities markets; and monetary policies that have reduced returns in monetary instruments.'
Analysing leveraging trend, Greguski said the leverage level has declined from 2009 levels, and in some markets, namely the UK, there is now virtually no leverage. 'Fundamentally, however, low interest rates and solid asset performance have generated meaningful positive leverage impact that amplifies overall fund performance.'
The IPD Global Quarterly Property Fund Index is based on a sample of 93 funds sharing similar features in Asia Pacific, Continental Europe, North America, and the UK regions with a total net asset value of $269 bn and a total capital value of over $326 bn as at December 2015.
