French institutional funds deliver lowest annual return ever - IPD

French Institutional OPCI property funds delivered a return of 1.7% over the first six months of the year, giving the index the lowest annual performance ever registered, according to the IPD.

The total return of 1.7% over six months means that the index's annual performance is 4.2%, or 30 basis points below the previous lowest annual performance registered in 2012.

French property funds have recorded a total return of 6.8% per annum Over four years.

Unlike the previous half-year, the strongest performance (2.3%) was recorded by the 25 vehicles with debt levels exceeding 50% of gross asset value.

Funds with a level of debt lower than 50% of gross asset value lost 120 basis points, compared with H2 2013, returning 1.9%. Unleveraged funds suffered a strong decrease, remaining in positive territory, at 0.5%.

Comparing with other asset classes, property equities registered the strongest performance at 19.8%, much higher than for the previous six months. They are followed by bonds, which returned 8.1%, significantly higher than the December 2013 performance of 1.2%.

The value of the underlying property holdings in these funds rose to €22 bn as of the end of H1 2014. The largest sectors in the index, by net capital value, remains offices (45%) and retail (23%).