The core US real estate market has produced its lowest annualised return since 2009, according to the National Council of Real Estate Investment Fiduciaries (NCREIF).
The NCREIF Open-end Diversified Core Equity (ODCE) index, which tracks $174bn (€202bn) of real estate assets, posted an annualised return of 8.77% for 2016.
The result confirms that US real estate has reached a plateau after several years of strong capital appreciation.
Quarterly capital growth stagnated at just above 2% throughout 2016; during the previous year, it hovered around 3.5%. Quarterly income returns remained stable during 2015 and 2016, at just above 1%.
NCREIF also revealed that net inflows into ODCE funds hit the lowest annual total since 2009.
ODCE funds, of which there are 24, attracted just $884m of net inflows in 2016, far below the $5-6.5bn annual trend of the previous two years.
Net inflows turned negative in the fourth quarter of 2016, as distributions and redemptions ($4.4bn) outgrew contributions ($3.9bn).
Last summer, IPE Real Estate reported that redemption requests had begun to build among ODCE funds.