IPD: UK Pooled Property Fund Returns fall for fourth consecutive quarter

UK Pooled Property Fund Indices reported a total return fall of -5.6% in Q2, 2008, according to the IPD report published on Thursday. The fall marks the fourth consecutive quarter of negative performance and a record decline of -19.9% on a 12-month rolling basis the report said.

There was however, some positive news. The IPD report, which is sponsored by HSBC and AREF, found that when compared with other types of indirect UK property exposure, the All Pooled Funds Index performed better than property equities and listed trusts, as represented by the FTSE Real Estate Index, which slumped -22.8% over the 3-months to 30 June 2008.

The IPD report also found falls in the broader UK equities and long dated gilts, which returned -1.4% and -4.7% respectively over the same period.

Cameron McVean, Head of Fund Services at IPD, said: 'Thirteen of the 63 funds reported on within the indices now have distribution yields above 5% up from 5 this time last year, reflecting the fundamental re-pricing that UK pooled property funds have witnessed over the past 12 months.'

Despite poor performance during the past year, the IPD report highlighted that pooled property funds continue to outperform other major asset classes by a significant margin over the long term. According to the report, the All Pooled Funds Index recorded a 10.3% annualised total return over the 10 years ending June 2008, against 3.5% and 5.3% for equities and gilts. Pooled property funds were also marginally ahead of the direct property market which recorded a 9.9% annualised return over the same period.