UK drives resurgence in non-listed fund performance

UK non-listed real estate funds delivered a performance of 14.9% in 2010 contributing significantly to the general upsurge in fortunes for the sector, according to the INREV Annual Index 2010 published on Wednesday.

For the first time since 2007, the European non-listed real estate funds sector turned in a positive annual performance. The net asset value-based return reached 7.4% in local currency, up from -7.7% in 2009. Continental European funds advanced at a slower rate than the UK delivering a performance of 3.8% in 2010 compared with -8.2% in the previous year.

'The general picture from the Annual Index 2010 is cause for cautious optimism. The strong performance figures have been driven largely by the recovery in the UK market which builds on the trend we saw beginning to emerge in 2009,' said Casper Hesp, senior research manager at INREV. France also performed well with returns of 11.2%.

Income returns have contributed more to the overall performance of continental Europe than growth in capital values. Core funds returned a performance of 7.5% in 2010 just ahead of value added funds at 7.3%. This represents a strong improvement for value added funds, which underperformed core funds by 11.6% in 2008 and 8.7% in 2009.