UK pooled property funds record net inflow in Q2

Over £320 mln (EUR 373 mln) of new money was invested in UK unlisted pooled property funds (PPFs) during the second quarter of 2009, according to the latest report published by the Association of Real Estate Funds (Aref).

Redemptions totalled £268 mln (EUR 312 mln) in the second quarter.

Mirroring the first quarter of 2009, redemptions from April to June were significantly lower than previous quarters. In net terms, the second quarter of 2009 had an overall net inflow of £52.4 mln - the first net inflow since the second quarter of 2008 (£39.2 mln). The secondary market also traded £116 mln, up 114% from the previous quarter, Aref said.

Over the 10 years to June 2009, PPFs delivered an annualised positive return of 4.3% - significantly higher than the FTSE Real Estate Index and FTSE ALL Share Index which delivered an annualised return of 0.2% and 0.1% respectively over the same period. By contrast, returns on bonds and direct property have overtaken those delivered by PPFs, coming in at 6% and 5.6% respectively on a 10 year annualised basis.