European non-listed institutional real estate funds achieved average total returns of 20.9% in 2006, according to the European association for investors in the funds (Inrev). 'This is a very high investment return. One would expect the median long-term figure for the industry to be somewhere in the range of 10% to 14%. I hope we see a gradual cooling off in the market as this can’t be sustained indefinitely,' Inrev chief executive Lisette Van Doorn commented at the association’s annual conference in Madrid last week.
European non-listed institutional real estate funds achieved average total returns of 20.9% in 2006, according to the European association for investors in the funds (Inrev). 'This is a very high investment return. One would expect the median long-term figure for the industry to be somewhere in the range of 10% to 14%. I hope we see a gradual cooling off in the market as this can’t be sustained indefinitely,' Inrev chief executive Lisette Van Doorn commented at the association’s annual conference in Madrid last week.
The analysis of 173 institutional vehicles with assets of EUR 82.8 bn was compiled by London-based fund benchmarker Investment Property Databank (IPD). The Inrev Index showed average total investment returns of 22% in 2005. Inrev said that the comparative data needed to be treated with caution as the Index base is still 'unfrozen.' This means the sample composition for previous years will change and the number for 2005 is now different from what it was last year.
'I'm very happy to see the big improvement in the quality of the data sample we’ve achieved, as we added EUR 13 bn in institutional assets in 2006 - 18% up on the previous year. More fund managers are delivering their data to us and we’re seeing the results in the accuracy of measuring the industry’s performance and the robustness of the numbers,' Van Doorn said. Norway (29.4%), France (26.3%), Germany (25.1%) and the UK (21.4%) delivered the highest level of total investment returns in local currency terms.