Total returns on non-listed real estate funds increased from a negative 0.3% in the second quarter of 2012 to a positive 0.4% in Q3, driven by improved returns for Continental Europe, according to the Inrev Q3 2012 Quarterly Index. Capital growth remained negative but increased from -1.1% to -0.3%.
Total returns on non-listed real estate funds increased from a negative 0.3% in the second quarter of 2012 to a positive 0.4% in Q3, driven by improved returns for Continental Europe, according to the Inrev Q3 2012 Quarterly Index. Capital growth remained negative but increased from -1.1% to -0.3%.
Continental Europe showed positive returns, driven by an increase in returns for multi-country funds. For single-country funds, Italy was the worst performing country in Q3 2012 with total returns of -0.6%, a decline from -0.4% in Q2 2012. The Netherlands also showed a negative return (-0.1%). Finland delivered the strongest total returns in Q3 2012 at 1.3% although this result was based on a small sample of seven funds.
Core funds continued to outperform value-added funds with total returns of 0.4 % versus 0.3%. Nevertheless, value-added funds showed the first positive returns since Q3 2011.
'These results demonstrate a clear uplift in performance, suggesting that the non-listed real estate funds sector is tracking the generally more positive outlook in the wider economy across Europe. However, the market remains uncertain,' said Casper Hesp, director of research and market information at INREV.
The UK has underperformed the Continental Europe index for the first time since Q1 2011 with multi-country funds driving the shift into positive territory for Continental Europe.
'Overall, this is an interesting set of results from which the majority of investors will probably take comfort,' Hesp added.
