European non-listed real estate funds returned to positive territory for the first time since 2007, according to the inaugural quarterly index published on Friday by Inrev, the European association for the non-listed sector.

European non-listed real estate funds returned to positive territory for the first time since 2007, according to the inaugural quarterly index published on Friday by Inrev, the European association for the non-listed sector.

The first ever Inrev Quarterly Index shows a return of 2.5% in the first quarter of 2010 and 1.5% in the second quarter in local currencies. This compares to an annual performance of -7.8% in 2009.

The UK market continued to lead the recovery returning 6.3% in quarter one and 2.9% in quarter two. This was considerably higher than Continental Europe at 0.4% and 0.7% respectively. However, the varied rates of recovery reflect the different shapes of the downturn with the UK experiencing a deeper dip from and recovery at a quicker pace.

'The non-listed property funds industry is back in positive figures but we continue to see a distinct difference between the pace of recovery for the UK and the Continent,' said Lonneke Löwik, director of Research and Market Information, Inrev. 'The UK has experienced a mixed two quarters with overall positive growth which slowed in the second quarter. The Continent may appear slower in its recovery but the impact of the downturn was not so deeply felt in the first place.'