Nordic property funds post improved returns for Q2 2014

Nordic property funds delivered a total return of 0.7% in Q2 2014, measured in local currency terms, according to the IPD Nordic Quarterly Property Fund Index.

This was above the previous quarter’s total return of 0.5% (Q1 2014) and contributed strongly towards the return for the 12 months ending Q2 of 1.5%.

Nordic property funds underperformed both Nordic property equities, which continued to deliver very strong returns at 5.4 % in Q2, and broader Nordic equities, which returned 5.1% in the same period.

The 5-year period covered by the index has been a challenging time for Nordic property funds, in which they have been heavily outperformed by both broad equities and property equities.

Håvard Bjorå, head of Nordic Client Consultants at IPD, said: 'It is encouraging to see fund performance continue to improve. Even though the aftermath of the credit crunch has been difficult for property funds, we have only recorded three quarters with negative returns since 2009, while 15 quarters have seen positive returns.'

The IPD Nordic Quarterly Property Fund Index consists of 11 contributing funds with a combined gross asset value of €4.6 bn at an loan-to-value ratio of 43.5%. National market weightings are tilted toward Norway, which accounts for 40% of total gross asset value.