The UK was the only market to see its non-listed real estate returns decline in performance in the third quarter, according to INREV.

Returns in the UK turned from a positive 0.7% in the second quarter to -1% in Q3.

The performance of European non-listed real estate funds fell over the period.

The association for Investors in Non-listed Real Estate Vehicles (INREV) said European non-listed real estate funds continued to deliver positive returns – although the rate of growth has slowed across most markets.

Henri Vuong, INREV director of research and market information, said the standout drop in the UK’s performance was “probably an early indication of the impact of the Brexit vote”.

Overall, European returns fell from 1.3% in the second quarter to 1% in Q3.

The index reflects the performance of 278 funds.

“While the brakes have clearly been applied to real estate market growth, European non-listed funds have continued to deliver a broadly positive performance this quarter,” Vuong said.

“Arguably, these results reflect the continuing advantage that real estate has over other asset classes.

“And it will be interesting to see how much, if at all, overall performance may shift in Q4 following the US presidential election.”

Dutch, French and German funds all registered third-quarter gains.

Open-ended funds delivered 1.3% over the quarter, while closed-end funds saw a contraction in performance, with total return declining by 0.1%.

The performance of core funds decreased from 1.4% to 1.1% from Q2 to Q3, but value-added funds remained stable, with a total return of 0.3% in Q3.