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The IPD Nordic Property Fund Index showed a return of 5.4% to Nordic real estate funds over 2011, well down on the 10.6% delivered in 2010, but much better than the five-year average, which was marginally negative at -0.2% per year.

Following the low point of direct property markets across Northern Europe late in 2009, a similar pattern of returns has also been seen in the UK unlisted market - as shown by the AREF/IPD UK Pooled Property Fund Index.

The positive returns of this phase of the cycle appear relatively subdued when set against the heady performance of the early 2000s; in part this has been due to a reduction in levels of fund leverage, at least in the UK market, where the average level of gearing is just over 15%, barely half its 2008 level. This reflects the fact that managers have paid off debt to reduce their risk profile.

This pattern of performance over the last two years has also been mirrored in France, as witnessed by the IPD OPCI RFA index, which reveals annual returns of 11.4% and 6.2% for 2010 and 2011 respectively. The impact of the Eurozone crisis on real estate markets across the continent, both inside and outside the currency area, is clearly evident. Leverage in French funds stands between the UK and Nordic fund levels at around 40% of gross asset value.