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Real estate portfolios that blend stocks with non-listed investments perform far better than portfolios with no listed sector allocation, new research indicates.

Portfolios with a listed property stocks component generate 50% better returns, according to the research which was presented at the European Public Real Estate Association’s (EPRA) annual conference in Paris.

A real estate investor with a 30% allocation to the international listed sector had a total return of 91% from June 2003 to June 2013, fund performance data compiled by consultants Consilia Capital shows. That compares with a 61% total return from UK non-listed real estate over the same decade, the study showed.

Alex Moss, managing director at Consilia Capital, said: 'Our findings show how investors are missing out on superior returns by having no exposure to the listed sector. It is surprising that many institutions and investors treat the listed property sector as part of their equity allocation and that so few take an integrated approach for their real estate portfolio. We found plenty of evidence, however, to make us confident that significant changes are afoot.'

A separate survey compiled by Consilia and Andrew Baum of Property Funds Research showed that 46% of respondents treat the listed property sector separately from their real estate portfolios. Just 14% have an integrated team spanning listed and non-listed or direct real estate investments, while 39% outsource management of their listed property allocation.

The survey’s respondents said their annual performance reviews discourage investment in the listed property sector because of short-term share price volatility, which may be correlated with other equities. This is the biggest obstacle to using quoted companies in a real estate portfolio, even though these securities generate long-term returns that match their objectives, the survey showed.

The survey can be found at .