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UK unlisted pooled property funds (PPFs) raised £704 mln (EUR 788 mln) of new money in the third quarter of 2009. This was more than double the £320 mln raised in the second quarter and the highest level for two years, the Association of Real Estate Funds (Aref) said in its latest Investment Quarterly.

The report examines trends in the PPFs industry through data provided by 67 member funds, representing a net asset value of £21.5 bn.

At £255 mln, redemptions in the third quarter were broadly level with the previous quarter (£268 mln) and the lowest since 2006. In net terms, inflows in the third quarter were £449 mln, the second consecutive quarter of positive net inflows, and this shifted the year-to-date total into positive territory at £231 mln. Included within these figures are net inflows to retail funds of £338 mln for the quarter, three-quarters of total net inflows, and £152 mln year-to-date.

On a three-month basis, the all-pooled funds index saw its first positive return for two years, returning 1.7%. A comparison with long-term trends suggests that PPF returns have over-corrected in the downturn, Aref said.

The weighted average PPF yield for the quarter was 5% (previous quarter 5.7%) compared with 3.8% (previous quarter 4.7%) for the FTSE All Share Dividend Yield and 3.7% (previous quarter 3.6%) for long-dated government bonds.