GLOBAL - Investors are increasingly focused on income returns over value appreciation when it comes to property investments, a survey by Aviva Investors has shown.

According to a survey of 188 multi-managers globally, overseeing £269bn (€321bn) in assets, the increased focus on income was seen across other asset classes, with 71% and 67% of equity and fixed income managers, respectively, reporting the same trend.

Aviva's global director of multi-manager Nick Mansley expected this fixation on income to be a "long-lasting theme".

"In an environment of low cash yields and continued uncertainty around economic growth, it is not surprising investors are more focused on income," he said.

However, the 50 real estate respondents had widely divergent outlooks, with Mansley attributing a "broad range of views" to varying conditions in markets worldwide.

According to Aviva, the majority expected capital returns to range between 0% and 10%, while a further 14% predicted growth above 10% and the remaining 17% struck a more pessimistic tone, expecting capital values to fall.

Unsurprisingly, given the split opinion regarding returns, market and economic outlook were cited as the greatest challenge facing the property industry by 60% of managers.

More than one-third cited continental Europe, while 27% believed emerging markets were "over-hyped" and offered relatively poor returns in relation to the investment's risk profile.

Of the surveyed managers, 70% also stressed the importance of a globally diversified investment approach, with a majority of managers pursuing such a strategy saying clients were interested in at least an international or even global investment strategy.

Respondents were also divided on whether the increase in prime global property valuations against secondary assets was sustainable.

One-quarter of respondents said they did not know, while a similar number said the increases were unsustainable.

The surveyed managers also overwhelmingly favoured a certain type of institutional client, with 57% saying they preferred pension funds and insurance companies over sovereign wealth funds or multi-managers representing institutional clients.