The Inrev index returned -26.8% in 2008 as the global financial crisis continued to affect the non-listed real estate funds sector in Europe. The index realised returns of -2.1% in 2007.

The Inrev index returned -26.8% in 2008 as the global financial crisis continued to affect the non-listed real estate funds sector in Europe. The index realised returns of -2.1% in 2007.

Andrew Smith, chief investment officer at Aberdeen Property Investors and chairman of Inrev's benchmarking committee, said the UK was the major contributor to the overall negative result for 2008. UK returns, expressed in euros, fell to -49% from -13.2% the year before. But Smith said the downturn is also being felt in Continental Europe. Returns there totalled -9.8% in 2008 compared with a positive result of 11.9% 2007.

'When you break down the returns by capital growth and income return, they show that the major contribution to the negative growth in 2008 came from the rapid decline in capital values. This is a result of financing problems and market confidence and market activity falling in 2008,' Smith said.

Inrev is the European association for non-listed real estate funds.